Home Prices Outpace Inflation

Home prices are outpacing inflation, a new report from Home Bay finds. The price per square foot of a U.S. home is higher than ever, it said.

Home Bay is an online publication that connects readers with expert real estate advice.

A new single-family home has a median square footage of 2,356 and a price of $397,100, making the median price per square foot $169. In 1980, the median price per square foot was only $41, 310% less than today’s price. 

The 50 most populous U.S. metros by price per square foot are:

1. San Jose ($801)
2. San Francisco ($656)
3. Los Angeles ($520)
4. San Diego ($494)
5. New York ($458)

The cities with the lowest price per square foot are: 

1. Memphis ($92)
2. Cleveland ($103)
3. Pittsburgh ($134)
4. Indianapolis (134)
5. Buffalo ($139)

Memphis also has the largest square footage of homes for cities on the list, at 2,630 square feet, in addition to having the lowest price per square foot. Miami has the smallest square footage overall, at just 1,376 sf.

The national median square footage is 2,356, but only two metro areas (Memphis and Salt Lake City) come in higher than that. Suburban and rural areas are best for buyers looking for more space at a lower cost. 

Data also shows home prices skyrocketed in the past two years. Since 2020, the median sale price of single-family homes has exceeded overall inflation by 139%. 

Although home prices are rising rapidly, so are the sizes of most homes. The median square footage of new single-family homes has increased 50% since 1980 — from 1,570 square feet to 2,356 sf. — while the average number of people per household has slightly decreased from 2.8 to 2.5, meaning Americans today have more space per person than previous generations.