Is Now a Good Time to Buy a House?

Our housing affordability index — which measures the cost of a median-priced home’s mortgage, taxes, insurance, and maintenance relative to median household income — currently reads 91.3%. That’s in the 87th percentile of all readings since 2000 — meaning housing costs relative to income have rarely been this stretched.

The affordability squeeze comes from two directions: home prices that have outrun wage growth, and mortgage rates that remain elevated after the post-pandemic tightening cycle. Until one of those inputs reverses meaningfully, buyers face a historically steep cost of entry.

All dollar values in this analysis are nominal (not adjusted for inflation), anchored to a $400K median home price and $2K/month rent at January 2000, and scaled forward using Case-Shiller and CPI indices.

The national home-price-to-income ratio is 15.6x, placing it in the 93rd percentile. This ratio divides the Case-Shiller national index (anchored to a $400K base price) by median household income, measuring how many years of gross pay it takes to buy a home.

A higher ratio means homes are more expensive relative to what people earn. While income growth has been solid, it has not kept pace with the surge in home prices since 2020. The gap implies buyers must either stretch their budget, save longer for a down payment, or look at lower-cost markets.

The inflation-adjusted (real) mortgage rate is 2.98 pp, at the 57th percentile. This subtracts trailing year-over-year CPI inflation from the 30-year fixed rate, showing the true cost of borrowing after accounting for inflation’s erosion of the debt.

The real mortgage rate is in a moderate range — borrowing costs are meaningful but not extreme. Buyers are paying a real cost of capital, though not at the elevated levels seen in prior tightening cycles.

A 20%-down, 30-year fixed mortgage on the median-priced U.S. home now costs $6,367/mo in principal and interest (P&I) alone. The orange line shows the same series in inflation-adjusted dollars, making historical periods directly comparable.

After adjusting for inflation, the payment index sits at the 88th percentile. Even in real terms, monthly payments are elevated. A meaningful decline would require either a substantial rate cut or a correction in home values — neither of which appears likely in the near term based on current trends.

The total monthly cost of owning — including mortgage P&I, property taxes, insurance, and maintenance — is currently $8,545/mo, compared to $4,879/mo in rent. That puts the ownership-to-rent gap at the 92nd percentile. (The Mortgage Payment section above shows P&I alone; this section adds the other costs a homeowner bears that are already baked into rent.)

Total ownership costs are historically high relative to rent. Elevated home prices and mortgage rates have pushed the all-in cost of owning well above what renters pay. The gap between what it costs to own and what it costs to rent is historically wide. In past periods like this, renting has typically been the cheaper monthly option.

This comparison reflects monthly cash outflows only — it does not account for equity built through mortgage payments, since future home values are speculative.

The map below shows the ownership-to-rent cost ratio for each metro. A ratio of 1.5x means owning costs 50% more per month than renting; at 2.0x or above, the monthly cost of ownership is double what renters pay.

Select a metro to see how the gap between ownership costs and rent has evolved over time. Markets with lower ratios have a smaller gap between what it costs to own and what it costs to rent. Higher-ratio metros have a wider gap, meaning owning costs significantly more per month than renting. Even if owning is more expensive than renting, it might still be a "good deal" because homes appreciate in value. Thresholds are based on historical norms, but home appreciation is always speculative.

The price-to-rent ratio is a common rule-of-thumb metric that divides home price by annual rent. It does not factor in interest rates or the actual cost of borrowing — for that, see the Ownership Cost vs. Rent section above.

The national ratio is 22.3x (71st percentile). Below 15x, home prices have historically been low relative to rents; between 15–20x is a moderate range; above 20x, home prices have historically been high relative to rents.

Metro-level ratios vary dramatically. Coastal cities with constrained supply tend to sit well above the threshold, while Midwest and Sun Belt metros often have lower price-to-rent ratios. Select a metro on the map or from the lists below to see its historical trend.