With home prices are surging, owners in some areas earned more via price appreciation over the last year than from their salary, according to a new study from Point2Homes, an online real estate marketplace.
In 2020, the net increase in home prices outstripped owners’ salaries in 15 of the largest U.S. metros, with the differences ranging from a mere $38 to up to nearly $60,000, according to the analysis.
The strongest home price gain for this was recorded in the San Jose, Calif., metro area, where the price of the median single-family home rose by $120,000—nearly twice the salary of the median earner in the area, according to Point2Homes.
Home prices have made double-digit annual gains across the country. Point2Homes identified the cities where owning a home has brought the greatest increase in value and how those price gains have compared as a percentage of personal yearly incomes. To do that, researchers analyzed single-family price growth from December 2019 to December 2020 and median individual earnings in the 50 largest U.S. metros to determine how much net value homes acquired in one year compared with the amount in local yearly earnings.
Here’s how the markets stacked up:
Source: “Home Price Increase: How Much Did Your House ‘Earn’ Compared to You in 2020?” Point2Homes.com (April 6, 2021)
