Get All Access for $5/mo

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 Edited by Jessica Thomas

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

Science & Technology

5 Automation Strategies Every Small Business Should Follow

It's time we make IT automation work for us: streamline processes, boost efficiency and drive growth with the right tools and strategy.

Business News

Former Steve Jobs Intern Says This Is How He Would Have Approached AI

The former intern is now the CEO of AI and data company DataStax.

Leadership

Visionaries or Vague Promises? Why Companies Fail Without Leaders Who See Beyond the Bottom Line

Visionary leaders turn bold ideas into lasting impact by building resilience, clarity and future-ready teams.

Marketing

5 Critical Mistakes to Avoid When Giving a Presentation

Are you tired of enduring dull presentations? Over the years, I have compiled a list of common presentation mistakes and how to avoid them. Here are my top five tips.

Side Hustle

'Hustling Every Day': These Friends Started a Side Hustle With $2,500 Each — It 'Snowballed' to Over $500,000 and Became a Multimillion-Dollar Brand

Paris Emily Nicholson and Saskia Teje Jenkins had a 2020 brainstorm session that led to a lucrative business.

Green Entrepreneur®

How Global Business Leaders Can Build a Sustainable Supply Chain

Businesses can build sustainable supply chains by leveraging technology to reduce environmental impact, optimize resources and track emissions while balancing operational efficiency and sustainability goals.