Consumers nationwide are griping about how much inflation has soared in the last year, but homeowners may have less to grumble about than the rest of the population. A report from real estate website Home Bay has found that housing prices have exceeded the pace of inflation by 86 percentage points since 1980 — and if you're a more recent homeowner, you're still seeing pretty phenomenal growth.
At a median square footage of 2,356 and a median price of $397,100 for a new single-family home, the median price per square foot is $169. That's a 310% increase from 1980, when the price was $41 per square foot, according to Home Bay. Consumer prices overall have gone up 224% over that same period, according to the Federal Reserve Bank of St. Louis.
Some of that growth in home prices is pretty recent, so millennial homebuyers should take heart. Since 2020, the median sale price of single-family homes has outpaced overall inflation by about 10 percentage points (17% and 7.1%, respectively), though location is a significant factor. The cities with the highest home price per square foot are:
- San Jose ($801)
- San Francisco ($656)
- Los Angeles ($520)
- San Diego ($494)
- New York ($458)
Conversely, the cities with the lowest price per square foot are:
- Memphis ($92)
- Cleveland ($103)
- Pittsburgh ($134)
- Indianapolis ($134)
- Buffalo ($139)
Homeowners also have more room to stretch out. The average size of single-family homes has increased 50% since 1980 (to 2,356 square feet from 1,570 square feet), even as the number of residents in each home has decreased, to 2.5 from 2.8.
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- Your First House: 13 Tips for Saving and Buying
- What You Need to Know Before Buying a House at Auction
- What to Know When Buying a House After Age 50