Buying a home has become considerably more expensive in the United States over the past four decades. A study by Clever Real Estate reveals that median U.S. home prices have risen more than twice as quickly as inflation since 1984. Currently, the median home price stands at about $423,100, while if prices had merely kept pace with inflation, that home would cost around $242,300—approximately $180,800 less.
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Overall, home prices have surged by 441% since 1984, in stark contrast to the 210% increase in inflation. Although the report does not provide specific data for South Dakota, housing affordability remains a concern in various communities within the state, including Rapid City and Sioux Falls. The rising home prices, along with elevated mortgage rates, have made it challenging for many first-time buyers to enter the market.
The researchers noted that home prices have consistently outpaced inflation across all 50 of the largest metropolitan areas in the country since 2011. However, there are indications that price growth may be slowing in some regions. Over the past year, home-price growth has lagged behind inflation in 27 out of the 50 largest U.S. metro areas. Factors such as labor, land, building materials, and financing costs contribute to rising housing prices, while higher mortgage rates tend to reduce demand.
This study was conducted using federal housing data and Consumer Price Index figures.