Accelerated Home Valuations Impact Affordability for Americans

First Home Partners champions the introduction of employee homeownership assistance benefits in light of the economic factors and interest rate conditions fundamentally making it more difficult for the average working American to buy a home.

The demand for homeownership is poised to continue growing, driven by the opportunity for employees to work remotely or in a hybrid capacity through their employers. Currently, 71% of US employers offer a hybrid workplace. By 2025, 32.6 million Americans, equating to 22% of the US workforce, are expected to work remotely.

In evaluating the overall valuation of homes in the US, our best source of data is the FHFA House Price Index. This index measures the movement of single-family home values across the United States. The price indices are represented as index numbers, which indicate relative change rather than absolute values. 

Examining the FHFA Index value pre-COVID in January 2020, the index for single family homes was measured at 280.39 points. As of April 2024, this number had risen to 424.30 points, representing a 50% increase over this four-year period. 

To consider these statistics from another perspective, the average home in the US is now 50% more expensive than it was just four years ago. The asset prices of residential real estate are far outpacing wage growth, creating a significant gap in affordability for many working Americans.

Employers who understand the fundamental desire for homeownership—especially in this new era of remote work—and recognize the associated challenges of acquisition are more likely to evaluate and incorporate new benefits to help employees achieve their homeownership goals.

By doing so, these employers will foster retention and loyalty, ultimately reducing hiring costs and building an inclusive culture through the distribution of personalized benefits such as employee homeownership assistance.