Housing Affordability Hits Historic Low as Price-to-Income Ratio Triples Since 1970s

Written by:

Rudi Davis

Date:

07 Oct 2025

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Housing costs have reached unprecedented levels of unaffordability, with today’s buyers facing a dramatically different market than previous generations, according to real estate entrepreneur Kent Keirsey, Co-Founder of Acre Homes.

“In the 1970s if you’re going to go buy a home, you would spend on average, the average home price was 1.9 times the average median income. Nowadays, if you look across the board, it’s more like six times your annual income across the US,” Keirsey says.

The Modern Affordability Challenge

While some point to high interest rates as the primary barrier to homeownership, Keirsey argues the fundamental price-to-income ratio represents a more significant shift. “People say, Well, you know, in the 80s, interest rates hit 13% for a home loan, but those were 13% on 3x your annual income, not 6x your annual income. So we’re really looking at the most expensive time in the US to buy a home,” he notes.

This dramatic shift affects even high-earning professionals. According to Keirsey, during his time in California, he witnessed “dual income doctors complaining about how hard it was to buy a home.” When even medical professionals struggle with housing costs, Keirsey says, “There’s something weird going on.”

The Debt Burden Reality

The increasing price-to-income ratio creates a concerning debt dynamic, Keirsey argues. Today’s buyers must take on significantly more leverage relative to their income than previous generations. This heightened debt burden comes at a time when financial advisors increasingly emphasize portfolio diversification and flexibility.

“We’ve never been more financially sophisticated, as these generations are coming up and thinking about diversifying and investing and having access to financial markets,” Keirsey observes. “So the idea that you’d have the majority of your wealth tied up in your home and also have this massive slug of debt on your balance sheet” creates a fundamental tension with modern financial planning principles.

Emerging Solutions

Through his company Acre Homes, Keirsey is exploring alternative approaches to homeownership that address these affordability challenges. The company’s model allows residents to share in home appreciation while maintaining lower monthly payments than traditional mortgages.

“We’re on a mission to protect the American dream here,” Keirsey says. “We’re not boxing anybody out of home ownership, we’re actually partnering with great American families that want to buy a home and share on the appreciation.”