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Over the past 40 years, U.S. home prices as tracked by the Freddie Mac House Price Index, have soared a staggering 494%.

The 10 states with the biggest home price gains between March 1984 and March 2024 were Washington (828%), Oregon (699%), Rhode Island (668%), Massachusetts (664%), California (664%), Hawaii (639%), Utah (610%), Montana (608%), Idaho (607%), Maine (605%).

During that 40-year span, overall inflation rose 203%, while median U.S. household incomes rose 233%.

Despite the significant disparity between national home price growth and inflation/median incomes, housing affordability is a different story. Traditional housing affordability measurements—taking into account mortgage rates, median incomes, and national home prices—show that in 2024, the situation is only marginally worse than it was for national housing affordability in 1984. This is especially true for buyers who are financing their housing market purchases (although, those who could afford to pay all-cash in 1984 had a considerable advantage over all-cash buyers in 2024).

The reason that 1984 and 2024 housing affordability are closer than incomes and prices alone suggest? Mortgage rates. In 1984, the average 30-year fixed mortgage rate was between 13.0% to 15.0%, whereas in 2024, it hovers around 7.0%. Of course, if you consider other factors like property taxes, home insurance, and down payment size, that could make 2024 housing affordability a little worse than traditional affordability metrics suggest.

It’s important to note that state-level home prices did not rise upward in a perfectly straight line over the past four decades; there were bumps along the way. And just because national home prices have soared by 494% over the past 40 years doesn’t mean the next 40 years will look the same.