With housing prices rising at their fastest pace in decades, the cost of buying a home has skyrocketed, as well.
The median price of a home in the United States has risen more than 7% over the past year, and in cities like San Francisco and Los Angeles, it’s now more expensive to own a home than rent it.
That’s partly because the number of new homes sold has more than doubled since last year, while median incomes have fallen by more than $3,000, according to a report by real estate data firm Zillow.
The report found that median home values in the U.S. jumped an average of 13% between 2016 and 2021, but median income increased an average $7,500.
The increase in median home prices is a result of a housing bubble that inflated prices in the housing market by selling the very houses that had once been worth so much more.
The biggest bubble in U.K. history has been fuelled by a housing boom fueled by an inflated stock market and an oversupply of new properties, but many other countries have seen similar bubbles in their housing markets, with prices and incomes growing at similar rates, according of the Institute for Fiscal Studies.
The U.N. predicts that house prices in many countries will continue to rise, even as they drop as they recover from their recessions, while incomes stagnate.
The Institute for Economic Affairs, a think tank that tracks the effects of technology, found in its latest study that the average household in developed countries will have more disposable income than their counterparts in developing countries, a fact that will lead to higher housing prices and greater inequality.
The United States, the United Kingdom, Germany and France have seen the most increases in median household incomes, according the report, with average household incomes in the four countries rising nearly 20% over their respective baseline years.
The U.B.E. report found the median income in the European Union rose by 8.3% over its baseline period in 2021.
The United States saw the biggest increase in the number and share of Americans living in poverty, rising from 2.3 to 2.7%.
In addition to rising housing prices, many people in countries like Japan are being priced out of the market, and some have resorted to working in the informal economy to survive.