Affordability constraints are talked about often when discussing the housing market situation in Virginia. Potential first-time home buyers, especially, have been in a tough spot as they look for housing options that fit their needs within their budget constraints. Moreover, affordability remains one of the reasons for the national median home buyer age having gone up significantly in recent years. To shed light on this topic, we compare how the household income of Virginia residents has changed along with the home price trends over the years. The apparent divergence in income growth and home price growth emphasizes the severity of the situation.

We compare median home prices in Virginia (in 2024 inflation-adjusted dollars) between the years 2012 and 2024 with the median household income in Virginia (in 2024 inflation-adjusted dollars) during the same time period. In this time frame, household incomes went up 9%, but home prices saw a 23% increase, almost three times that of the increase in income levels. This difference is even more pronounced if we look at data going back much farther. In 2012, a median home cost 3.8 times a median household’s income. In just 12 years, this median home cost has become 4.3 times as much as a median household’s income. This effect has seen increased momentum in the years immediately after the Covid-19 pandemic.

Looking at the data, it becomes clear why potential home buyers are having to delay their home purchases due to cost constraints. It is worth noting that prices of other goods and services in the economy have also gone up, but incomes have not risen similarly. While home price appreciation is great news for current homeowners, it has been a roadblock for potential home buyers whose paychecks have not kept up with the increase in home prices across the Commonwealth.

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