“The American dream of owning a house may be vanishing,” the U.S. Government Accountability Office said in a research report, “because of higher housing prices and a decline in housing affordability.”
“Many young, middle-income, and first-time home buyers can no longer afford to buy an existing house.”
The GAO released this dire news on May 11, 1978. The median selling price of a house “hit an all-time high of $44,300” in 1976, the GAO glumly reported.
Fast forward four and a half decades and the median price of a home in the fourth quarter of 2023 was over $417,000.
Get out of here, disco-era GAO. Your median-priced home would be slightly better than the median amount for a down payment these days.
Why are house prices so high?
Read more: How much house can I afford?
This graphic shows the steady rise of median home prices over the years, then the dramatic jump in prices beginning in 2020. Prices peaked in the fourth quarter of 2022 and then fell sharply.
This is about the best news a prospective home buyer today could look for. Prices seem to be moderating to a steady climb again rather than the previous hockey stick of growth.
The ongoing rise in home prices can be pegged to specific catalysts.
Real estate investors are snagging fixer-uppers and blocking family buyers. The U.S. housing supply is aging and in need of repair. The median U.S. home is over 40 years old, the Brookings Institution said in a recent analysis.
Investors, flush with cash to spend,…
