A new study published on Wednesday revealed that over the last decade, home prices across the country have nearly doubled, rising by 95 percent. At the same time, average hourly earnings have grown at less than half that rate, with a 44 percent increase. Meanwhile, the general inflation rate, as measured by the Consumer Price Index, has increased by only a third since 2014.
Researchers from Construction Coverage, using data from Zillow, analyzed real estate transactions from over 600 cities across all 50 states and found that Franklin, Tennessee, known nationwide for its charming small-town appeal, was among the areas that experienced the largest surges in home values from 2014 to 2024. Median prices of homes that sold climbed from $376,284 in 2014 to $876,282 in 2024 – a staggering 132.9 percent increase.
Although the rate of increase has recently slowed to more historical norms, the combination of relatively high mortgage rates and persistent inflation continues to be a significant barrier to entry for homeownership, which appears to be contributing to a softening of the residential real estate market in the area.
Realtor.com’s marketplace statistics show that the average price of homes for sale in December tops seven-figures at $1.075 million, but the time it takes that home to sell has climbed from a low of nine days in February 2022 to three-and-a-half months (75 days) now.
Since the 1950’s, the rule of thumb was that households could afford a home priced at about 2.5 to 3 times their annual income. However, over the last twenty years – especially during the housing boom of the early 2000s and post-2008 financial crisis recovery – this ratio has shifted due to changes in mortgage rules and rates, and economic conditions.
As banks reinstate decades-old lending norms requiring substantial down payments and stricter debt-to-loan ratios, the affordability crisis for home buyers intensifies.
In the broader market, Western and Southeastern states have seen the most dramatic growth. Idaho leads with a lofty 155.5 percent increase in home prices, followed by Florida at 132.2 percent, Washington at 129.1 percent, and Utah at 127.5 percent.
Meanwhile, the Midwest experienced more modest increases, with states like Louisiana, North Dakota, and Alaska reporting gains of just 24.1 percent, 26.7 percent, and 37.3 percent, respectively.
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Christina Botteri is the Executive Editor at The Tennessee Star and The Star News Network. Follow her on Twitter / X @christinakb.
