Inflation-adjusted US home prices have reached their highest level in recorded history, surpassing the 2006 housing bubble peak and sitting more than double the long-term historical average, according to Case-Shiller index data analyzed by re:venture Consulting.
The inflation-adjusted Case-Shiller Home Price Index reached 299.9 in 2025 — above the 266.4 peak recorded before the 2008 crash and more than double the historical average of 145. The index, which adjusts home prices for consumer inflation, traces back to 1890.
Monthly mortgage payments on a median-priced home now consume more than 30% of median household income — up from 21% in 2019. The median US household earns roughly $86,000 a year; the income needed to comfortably afford a median-priced home sits at $111,252. The national median home price stands at approximately $405,300 as of early 2026.
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By inflation-adjusted prices, 2025 is the record — but the full picture is messier. The National Association of Realtors’ Housing Affordability Index sits at 111.3, meaning a median-income family can technically still qualify for a median-priced home. By that measure, 2023 — when mortgage rates topped 7% and prices were already elevated — was the single worst year on record for affordability. Rates have since eased to around 6.25-6.38% and annual price growth has slowed to 1.4%, below consumer inflation. The relief is real but marginal: by any measure, affordability remains well below historical norms.
Realtor.com estimates a nationwide housing shortfall of nearly 4 million homes, a gap that rate cuts or wage growth alone cannot close. Harvard’s Joint Center for Housing Studies found homebuying fell to its lowest level since the mid-1990s, with the price-to-income ratio climbing from 4.3 in 2003 to nearly 6.0 today. Trump administration tariffs are expected to add a further $12,800 to $25,500 to the cost of building a new single-family home.
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Realtor.com calculates that returning monthly payments to 2019 affordability levels would require household incomes rising 56% to roughly $132,000 — well beyond any realistic near-term trajectory.
Housing economists project affordability could recover to historical norms by 2030 if mortgage rates ease to around 5.5% and price growth holds flat.”
As long as prices are flat and incomes are rising 3% a year, affordability is improving,” AEI Housing Center co-director Ed Pinto told Fortune this week — while cautioning the gap remains so large that lower- and middle-income families “could get locked out for years to come.”
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