The 2023 real estate market was a particularly challenging one. Rising mortgage rates either locked buyers out of homeownership or locked sellers in to their existing low rate, curtailing new home listings and contributing to the U.S. housing shortage.
Today’s stalemate in the real estate market is a drastic change from just two years ago, when surging demand caused home sales to reach a 15-year high. Now, sales are down 15% year-over-year, and nobody feels like a winner.
To gauge how Americans are navigating new market realities, Clever Real Estate and its partner websites commissioned a series of surveys and data-driven analyses throughout 2023.
LBM Resources
Cleaver compiled a selection of the most compelling real estate facts from our research to provide a snapshot of the ever-changing housing market headed in to 2024.
1. Americans remain surprisingly optimistic about achieving their goals in 2024. Nearly a quarter of millennials (23%) and zoomers (24%) say buying a home is a goal next year, but just 28% of Americans who wanted to buy a home in 2023 actually did.
2. About 83% of non-homeowners want to buy a house but can’t because of financial reasons. The top reasons are: They don’t have enough for a down payment (53%), homes near them are too expensive (43%), and interest rates are too high (36%).
3. Homes are out of reach for many Americans because home prices have risen more than 2x faster than income since 2000. Since then, home values have soared 162%, while income has increased only 78%. If home prices had grown at the same rate as income since 2000, the median U.S. home would cost nearly $294,000 — about 32% less than today’s price of $433,100.
4. To afford a home today, Americans need an average income of roughly $166,600, but the median household income is just $74,580.
5. The average house-price-to-income ratio in the U.S. is 5.8, more than double the 2.6 experts recommend. None of the 50 most-populous metros in the U.S. have a home-price-to-income ratio that’s equal to or below the recommended 2.6. Pittsburgh has the lowest home-price-to-income ratio at 3.2, while San Jose has the highest at 12.1.
6. As home prices rise, Americans are paying more for less space. Since 1980, the median price per square foot for single-family homes has increased 368% — from $41 to $192. At $133 per square foot, Cleveland is the least expensive city based on the price per square foot, while San Jose is the most expensive at $845 per square foot.
7. Soaring home prices are connected to a surge in homelessness. Metro areas with above-average home values have homeless rates about 2.5x that of metro areas with below-average home values.
8. Compromising on their priorities inevitably led to regret among home buyers. About 93% of home buyers had regrets — up from 72% in 2022. The most common regrets were:
- Buying homes that require too much maintenance (33%)
- Buying too quickly (30%)
- Spending too much (28%)
- An interest rate that’s too high (28%)
9. Americans said the most desirable places to live have a low crime rate (46%), affordable homes (43%), and a low cost of living (41%), but they rank California as the best state to live, followed by Florida and New York—three expensive states. The most undesirable states are Alaska, Alabama, and California.
10. Although competition has eased nationwide, a surprising 38% of home buyers still paid more than the asking price for a home in 2023. However, 58% of recent buyers and 63% of first-time buyers admit they overpaid for their home.
Find more statistics from Clever here.
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