The Housing Scoreboard

1. Prices tripled while incomes didn’t. The median home went from $142,000 to $413,000 — a 2.9x increase. Median household income over the same period rose from roughly $42,000 to $80,000 — a 1.9x increase. That gap — prices growing 50% faster than incomes — is the single number that defines the housing crisis. In 2000, the median home cost 3.4 times the median income. By 2025, it cost 5.2 times. The price-to-income ratio hasn’t been this stretched since before the 2008 crash, and this time the appreciation isn’t built on subprime lending — it’s built on a genuine shortage of homes.

2. Rates went on a round trip — but affordability didn’t. The 30-year mortgage started at 8.21% in January 2000, collapsed to 2.65% in January 2021, then rocketed back to 6.96% by January 2025. On paper, rates are lower than they were 25 years ago. But the monthly payment on the median home tells the real story: $990 in 2000, $1,130 in 2021, $2,200 in 2025. The payment doubled between 2021 and 2025 alone. Rates may be “lower,” but the combination of rates and prices has made housing more expensive to buy than at any point in the series. The all-time low of 2.65% was a monetary experiment that lasted barely a year — and it pulled forward demand that left the market frozen for the next three years.

3. America stopped building — and never really started again. Housing starts peaked at 2,273K in January 2006, then crashed 79% to 478K by April 2009. The recovery was painfully slow: it took until 2021 — fifteen years — to merely return to 1,600K, a rate still below the long-run average needed to match population growth and household formation. The construction deficit accumulated over that 15-year stretch is estimated at 3 to 5 million homes. That’s not a number that gets fixed in a year, or even a decade. Builders who watched their companies destroyed in 2008 adopted a philosophy of deliberate restraint — and their caution created the supply shortage that powers today’s price growth.

4. The lock-in effect froze the market. When mortgage rates surged from 3% to 7%, homeowners who had locked in pandemic-era refinances had no incentive to sell. Over 80% of outstanding mortgages carry rates below 5%. Selling means giving up a $1,500/month payment for a $2,700/month payment on an equivalent home. The result: existing home sales collapsed from 6.6 million (2021) to 4.3 million (2025) — a 35% decline. Inventory dropped to record lows. The “great freeze” trapped sellers in their homes, locked first-time buyers out of the market, and created a two-tier system where mobility depends on when you bought your home, not what you can afford.

5. Geography became destiny. In 2000, the regional price gap was modest: the West ($193K) cost 1.6x the Midwest ($124K). By 2025, it cost 2.0x ($619K vs. $316K). The Northeast surged from $149K to $502K. The South, once the affordable alternative, hit $363K. Every region became more expensive, but the West and Northeast pulled away — creating a country where a household earning $100,000 can comfortably buy in Kansas City but is priced out of Seattle, San Francisco, Boston, and New York. The regional divide isn’t just about prices; it’s about who gets to live where, which employers can attract workers, and which cities grow or shrink.

The regional table reveals a striking pattern: every region’s 2012 trough was still above its 2000 price. Even the worst housing crash in 80 years couldn’t push national prices back to where they started the century. The Midwest came closest — its 2012 price of $142K was just $18K above 2000 — but the Northeast barely dipped below its 2006 peak. The crash was a national event, but its regional impact varied enormously. The sand states (Arizona, Nevada, Florida) saw 40–50% declines; the Northeast saw 15–20%. And every region recovered to far surpass its pre-crisis peak.