You can be on Entrepreneur’s cover!

Housing Is Less Affordable Now Than at the Peak of the 2008 Housing Bubble New data found that the average American would need to spend 42.9% of their income to afford a median-priced house.

By Madeline Garfinkle

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

ArLawKa AungTun | Getty Images

Although the housing market has shown signs of cooling in certain areas after all-time highs throughout 2022, new data has found that housing affordability is still a widespread issue for Americans.

According to the Atlanta Fed's Housing Affordability Monitor, housing affordability is worse today than it was more than a decade ago during the housing bubble of 2008. As of December 2022, the average American household would need to spend 42.9% of its income to afford a median-priced home. This marks a new high since August 2006, when it was 41.1%. The data also found that affordability declined 24% year-over-year.

Related: In the '80s, Mortgage Rates Were Almost Three Times As High — But It's Still Harder To Buy a Home Now

The steep decline in housing affordability could be the result of ongoing high prices for housing coupled with rising mortgage rates. When the housing market boomed during the pandemic into 2021 and much of 2022, home prices reached record highs across the country.

Over the past year, as prices began to box out millions of would-be buyers and the Fed raised interest rates, demand finally began to slow. Still, despite the decline in home prices, housing affordability is at an all-time low, and the total value of American homes is still up 6.5% from the same period a year ago, according to the data. Although mortgage rates are high, they're not as high as they were at the peak of November 2022 at 7.08%, so the slight decline sparked a minor uptick in homebuyers at the beginning of 2023, demonstrating just how competitive the housing market still is.

Related: Declining Mortgage Rates Spark Uptick in Interest from Would-Be Homebuyers

For those looking to buy a home, it might be wise to wait it out for a few more months.

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Resumes & Interviewing

Build a Better Resume with This $35 Subscription

AI Resume Builder promises to help you apply to jobs twice as fast.

Side Hustle

He Took His Side Hustle Full-Time After Being Laid Off From Meta in 2023 — Now He Earns About $200,000 a Year: 'Sweet, Sweet Irony'

When Scott Goodfriend moved from Los Angeles to New York City, he became "obsessed" with the city's culinary offerings — and saw a business opportunity.

Marketing

I Got Over 225,000 Views in Just 3 Months With Short-Form Video — Here's Why It's the New Era of Marketing

Thanks to our new short-form video content strategy, we've amassed over 225,000 video views in just three months. Learn how to increase brand awareness through short-form video content.

Business News

Samsung Makes 6 Day Workweeks Mandatory for Executives as the Company Enters 'Emergency Mode'

Samsung said its performance "fell short of expectations" last year. Now executives are required to work weekends.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.

Leadership

You Won't Have a Strong Leadership Presence Until You Master These 5 Attributes

If you are a poor leader internally, you will be a poor leader externally.