Two U.S. home price-to-income ratios remained above their historical medians in 2026 estimates, CalculatedRisk writer Bill McBride found, indicating that recent income gains have yet to return his measures to typical levels.
In an Oct. 19 analysis, McBride put the ratio based on wages about 7.5% below its 2022 peak. A second ratio, based on median household income, was about 11% below its 2022 high. Both comparisons concern the relationship between a home price index and income; the percentages do not describe changes in home prices alone.
The Social Security Administration reported that its National Average Wage Index reached $72,800.33 in 2025, up 4.23% from $69,846.57 a year earlier. The index has risen nearly 31% since 2020. McBride used that wage measure for one comparison and U.S. Census Bureau median household income for the other.
To construct the wage-based ratio, McBride divided the midyear national Case-Shiller house price index by the wage index after dividing the wage index by 1,000. His second calculation used the same home price index and nominal median household income. The Census Bureau has released household income figures through 2025.
The 2026 readings depend on McBride's income assumptions: a 4% increase in the wage index and 4.9% growth in median household income. He also noted limits to the comparisons. Income figures arrive with a lag, while Case-Shiller tracks an index rather than actual home prices in dollars. Using median household income also avoids the distortion that a small number of high earners can create in an average.
McBride expects a seven-year housing-price adjustment and points to 1978–82 as a historical parallel for the current cycle.
