Median U.S. Home Prices Over Time: Why Real Estate Keeps Climbing
By: Casey Gilling - Kidd & Leavy Real Estate
Real estate is one of the most consistent long-term investments in America—and the numbers prove it. Whether you’re a homeowner, a first-time buyer, or someone considering selling, understanding how home prices have changed over the years can offer some real clarity.
Let’s take a look at the shift in median U.S. home prices from 1968 to 2025:
Median U.S. Home Prices by Year:
- 1968 – $20,295
- 1970 – $22,984
- 1980 – $62,049
- 1990 – $96,826
- 2000 – $146,001
- 2010 – $172,794
- 2020 – $298,860
- 2025 – $420,027 (projected)
That’s nearly a 2,000% increase over the past 57 years. Let that sink in.
Why Are Home Prices Appreciating?
This steady (and sometimes rapid) rise in home values isn’t just coincidence—it’s a combination of several powerful forces at work. Here are the key reasons why prices keep going up:
1. Supply and Demand
The simple truth is there aren’t enough homes to meet buyer demand in many areas of the country. As more people move into desirable cities, small towns, and vacation markets like Northern Michigan, the competition for available homes intensifies—and prices go up.
2. Inflation
Over time, the dollar loses some of its purchasing power, and that drives up the cost of goods—including homes. What cost $20,000 in 1968 just doesn’t stretch the same way today. Inflation touches everything: construction materials, labor, land costs, and more.
3. Rising Construction Costs
Building a new home today is more expensive than it was even just a few years ago. Supply chain disruptions, increased costs of lumber and concrete, and labor shortages have all contributed to higher construction expenses—which translates into higher home prices overall.
4. Interest Rate Cycles
When interest rates drop, borrowing becomes cheaper—and more people can afford to buy, which increases demand. When rates rise, it can cool the market temporarily, but historically, home values have continued to climb over the long term regardless.
5. Demographic Shifts
Millennials—the largest generation in U.S. history—are now in their prime home-buying years. Gen Z isn’t far behind. As millions of people seek to buy homes, especially in regions with limited inventory, prices are being pushed up naturally by demographic pressure.
6. Desirable Locations Are In High Demand
Many buyers are migrating toward smaller towns and scenic areas for lifestyle reasons—especially post-pandemic. Northern Michigan, for example, has seen a notable increase in demand as people seek space, nature, and a higher quality of life. Areas that were once considered “second home markets” are now being filled with full-time residents, adding more strain on local inventory.
What This Means for You
If You’re Buying:
The numbers show that waiting rarely results in lower prices over time. While there can be short-term market corrections, the long-term trend continues upward. Buying sooner rather than later helps lock in your cost of living and start building equity immediately.
If You’re Selling:
Your home may be worth far more than you think—especially if you’ve owned it for a decade or more. Tapping into your home equity now can open the door to upsizing, downsizing, investing in another property, or even just creating more financial flexibility.
Real Estate Is Still One of the Best Investments
Unlike many investments that can fluctuate wildly, real estate offers long-term stability and the potential for strong returns. It also comes with the added benefit of providing shelter, comfort, and lifestyle value along the way.
If you’re curious about what your home is worth or want to better understand what’s happening in our local market, I’d be happy to help.
Contact me directly—whether you’re ready to make a move or just want to explore your options, I’m here as a resource.
