Arizona is ranked second among states where home prices are rising faster than wages, according to an analysis by MyEListing. Arizona’s housing price and wage growth disparity over the last five years stands at 37.7%.
The U.S. housing market is no stranger to volatility, and housing affordability continues to remain a significant concern for aspiring homeowners waiting on the sidelines as home prices rise and mortgage rates increase.
At the core of this concern, however, lies the crucial interplay between housing prices and wages that determines the financial well-being of families and individuals. To better understand this dynamic, we’ve analyzed data between 2018 and 2022 to examine how, in each state, housing prices have evolved compared to wages.
The results highlight disparities that reflect economic trends, regional influences, and the challenges many Americans face in finding affordable housing.
Understanding the Data
The data presented showcases the percentage increase in housing prices and wages across all 50 US states over a five-year period, from 2018 to 2022. This “Housing vs. Wages Growth Gap” quantifies how much more housing prices have grown compared to wages in each state.
The data for the United States presents a sobering picture, as the nation faces a 15 percentage point gap between housing price and wage growth.
Over the last five years, housing prices have increased by an average of 37.2%, significantly outpacing wage growth of 22.2%.
Between 2018 and 2022, median wages only increased by $12,720. That’s while national housing prices increased by a whopping $91,200, an absolute difference of $78,480.
This national trend signifies that, on average, housing affordability is a growing concern, as housing prices are rising much faster than wages. While some states exhibit extreme gaps, such as Idaho, the national outlook points to a pressing need for addressing housing affordability and wage growth at the national level.
Where Are Home Prices Rising Faster Than Wages?
Here are some more of our key findings on where home prices are rising faster than wages.
Western States Lead
Western states, including Idaho, Arizona, and Utah, feature prominently at the top of the list, emphasizing the region’s rapid growth and housing demand.
Southern States Follow
Southern states, like Florida, Tennessee, and Georgia, also show substantial gaps, indicating economic vitality among housing affordability challenges.
Diverse Wage Growth
States with both high and low wage growth, such as New Hampshire and Delaware or Louisiana and Alaska, demonstrate that wage increases do not necessarily correlate with housing price growth.
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