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After initially appearing to have surged in May 2017, revisions to median new home sale prices in June 2017 are now more consistent with a flat-to-slowly rising trend for the year to date. The following chart shows the latest updates through June 2017 in the relationship between the trailing twelve month average of median new home sale prices against the trailing twelve month average of median household income from December 2000 through June 2017.
In terms of relative affordability for typical American households, the following chart showing the ratio of median new home sale prices to median household income indicates that new homes remain near their all-time highs on a nominal basis.
Sharp-eyed readers will recognize that these charts look a bit different from versions we've previously presented. Aside from the median new home sale price revisions, we have completely substituted our estimates of median household income from December 2000 through May 2017 for data over this period that was previously reported by Sentier Research. Please follow this link for more information about how we derived the median household income estimates for this period, along with our initial estimate for June 2017.
U.S. Census Bureau. Median and Average Sales Prices of New Homes Sold in the United States. [PDF Document]. Accessed 6 August 2017.
U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Population. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 1 August 2017. Accessed: 1 August 2017.
U.S. Bureau of Economic Analysis. Table 2.6. Personal Income and Its Disposition, Monthly, Personal Income and Outlays, Not Seasonally Adjusted, Monthly, Middle of Month. Compensation of Employees, Received: Wage and Salary Disbursements. [Online Database (via Federal Reserve Economic Data)]. Last Updated: 1 August 2017. Accessed: 1 August 2017.
Sentier Research. Household Income Trends: January 2000 through May 2017. [Excel Spreadsheet with Nominal Median Household Incomes for January 2000 through January 2013 courtesy of Doug Short]. [PDF Document]. Accessed 22 June 2017. [Note: We've converted all data to be in terms of current (nominal) U.S. dollars.]