Twin Cities home affordability increased last year
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The median home price in the Twin Cities was about four times that of the median household income in 2023, according to a new Harvard study.
Why it matters: While the metro area is still a relatively affordable place to live compared to other big cities, the trend line over the past 15 years has not been good.
What they found: Home affordability improved last year as wages grew faster than local home prices.
Yes, but: That only tells part of the story.
- Heightened mortgage rates have made buying homes more expensive, especially for first-timers.
- Plus, rapidly rising costs for hazard insurance and property taxes have made it more costly for those who already own their homes.
The big picture: In 2023, the national median sales price for existing single-family homes was 4.9 times the median household income, Harvard researchers from the Joint Center for Housing Studies found.
- The Twin Cities ratio of 4:1 pales in comparison to places like San Francisco (9:1), Denver (6:1) and Boston (6:1).
What's ahead: Metro-area home prices have risen about 3% this year and Realtor.com projects them to rise 6.2% next year.
- Interest rates have declined slightly in recent months, but Realtor.com projects them to stay above 6% in 2025.
Go deeper: Researchers' interactive map