Housing affordability: 1990 to today

Price-to-income, by decade

Country median home price divided by country median household income. Higher = harder to afford. The OECD long-term average from 1990 to 2010 was around 4.3×; today most rich countries are well above 6×, with some past 9×.

What happened

The housing market in most rich countries has detached from local wages. Three big drivers:

1. Restrictive zoning kept supply growth below household formation since the 1990s in most rich-country cities. New homes per capita have collapsed.
2. Falling interest rates from 1990 through 2021 made existing homes more valuable as a financial asset. Same monthly payment, much higher principal.
3. Global capital flows found supply-constrained cities. London, Sydney, Vancouver, Amsterdam, Auckland all trade at premiums driven partly by non-resident demand.

Where it eased

The US was the global outlier — a price drop after the 2008 crash actually reset US affordability roughly to its 1990 level by 2012, before climbing again. Japan's 1990 bubble peak (11.6×) was so extreme that even today's 7.8× is below it. Most other rich countries set new affordability lows in 2020–24.

How to read this if you're trying to buy

• If your country's ratio is above 6×, the median home is effectively a stretch for the median household. Not your fault.
• Family help, partner's income, and longer mortgage terms are now structural, not edge cases.
• The math today expects two earners. The 1990s math expected one. That difference is most of the apparent affordability collapse.
• Renting is not failure. In several markets — Germany, the Netherlands, Switzerland, Japan — long-term renting is normal and the price-to-rent ratio makes buying questionable.