MW The great 'shrinkflation' of housing in America: What $500,000 buys today vs. what it bought in 2019

By Aarthi Swaminathan

In 2019, $500,000 was more than enough to buy a single-family home in much of the U.S. Today, that amount only covers the cost of a condo at best in some cities.

"I can't imagine trying to shop in this market," a homeowner who purchased his home in 2019 says, reflecting on how home prices have grown since.

When Matt Totten bought his home in Dunwoody, Ga., in 2019, he paid $532,000 for the 1970s ranch-style house.

The property was on the market for three weeks before Totten and his wife looked at it. "We were the only ones putting an offer on it," he told MarketWatch. They bought it for $13,000 less than the asking price.

Buying that same house today would cost him far more. Based on Zillow's (Z) estimate of his home's value, which factors in the recent sales prices of homes in his area, it could sell for over $830,000, Totten said. The house across the street recently sold for over $850,000.

"It's crazy," Totten said, reflecting on the home-price growth. "I can't imagine trying to shop in this market."

The great shrinkflation of housing in America is here.

As home prices skyrocketed to record highs over the last few years, home shoppers have found that their budgets now fetch increasingly less.

The last year when the housing market was relatively stable and mortgage rates were in the 4% range was 2019. Mere months later, a pandemic and plunging interest rates drove a home-buying frenzy. Surging home sales drove up prices as the 30-year mortgage sank to about 2%. Just a few years later, that rate had shot up to over 7%.

A growing gap in housing affordability

Affordability has shrunk over those six years.

In November 2019, the annual median household income was about $66,000. A family buying a median-priced home, which was then $260,000, would have spent about 28.7% of their gross income on the house, according to data from the Federal Reserve Bank of Atlanta.

By November 2025, the median household income had grown to $85,000. But a family buying a median-priced home for $402,000 would need to spend 30% of their gross income on the house, the data showed, pushing them to an important limit: Housing costs are only considered affordable when they're 30% or less of gross income.

This chart illustrates how affordability has shrunk since 2019:

Today, buyers looking for affordable homes have moved farther and farther from city centers, sacrificing short commute times for square footage.

In many parts of the nation, $500,000 was more than enough to buy a single-family home in 2019. The median price of an existing home was $276,900 at the tail end of that year.

Today, that amount only covers the cost of a condo at best in some cities.

MarketWatch worked with real-estate platform Zillow to track how home values have changed over the last six years. What types of homes are available for $500,000 today, versus what was on the market in 2019 for that price?

The findings provide an up-close look at how the housing market's tectonic shifts have played out across America.

$500,000 then versus now

In January 2019, about 88% of properties in the U.S. sold for less than $500,000, according to Zillow data. That share dropped to 70% in November 2025, the most recent month for which data were available.

In California, one of the most expensive states in which to buy a home, about 57% of properties sold for less than $500,000 in January 2019, according to Zillow. That share had dropped to 28% by November 2025.

In New Jersey, another expensive state for homeowners, the drop in the number of homes at the $500,000 mark was even more dramatic. In January 2019, about 83% of properties sold for less than $500,000, according to Zillow. That share had dropped to 48% by November 2025.

In Wisconsin, home values haven't seen such steep climbs. In January 2019, about 97% of properties in Wisconsin sold for less than $500,000. That share dropped to 84% in November 2025, the most recent month for which data were available.

Rahway, New Jersey

Back in 2019, a buyer with a budget of $500,000 would have been able to afford a brand-new, 2,000-square-foot house with four bedrooms in many parts of northern New Jersey, Michael Martinetti, a real-estate agent who runs a team out of Union County, N.J., told MarketWatch.

These days, a buyer with that same budget would have to look further west or south, and settle for either a longer commute time into New York City or a smaller lot size.

The number of homes for sale is still very low in northern New Jersey compared with prepandemic levels, so bidding wars are still common, Martinetti said. "There's no land here, and there is high demand from people in New York and New Jersey," he noted.

In Rahway, N.J., a popular commuter town that's part of the New York-Newark-Jersey City metropolitan area, the average home was valued at around $310,000 in December 2019. By December 2025, values were up 70% to $527,000, according to Zillow data.

A previous listing of Martinetti's compared with one of his current listings highlights how much less $500,000 gets buyers today versus 2019.

Carlsbad, California

Home prices in San Diego have surged in recent years. With the median-priced detached home selling for $1.4 million in recent months, "$500,000 doesn't buy you much at all," Mike Safiedine at Re/Max Connections told MarketWatch.

Back in December 2019, the average value of a San Diego home was about $639,000, according to Zillow data. By December 2025, the average home was valued at $972,700 as of Dec. 31 - a jump of over 50%.

To find something at a $500,000 price point, a home buyer would have to venture east toward the mountains - away from the desirable coast and toward fire-prone areas - where they might find a one-bedroom apartment, Safiedine said.

Insurance costs are a key factor to include when buying a house in California. Recent wildfires in the state are expected to push up home-insurance premiums.

In Carlsbad, Calif., a coastal town known for its beaches, a similar story is playing out. The city, which lies 35 miles north of San Diego, saw its average home value go up 89% between December 2019 and December 2025, from roughly $700,000 to $1.33 million.

One condo in Carlsbad sold for $510,000 in April 2019, according to Zillow's property records. The three-bedroom unit was then resold again in 2019 and then rented out, before being sold again in July 2025 for $1.05 million.

For the same house, one has to double their budget. For the same price today, one has to go further away from the coast and settle for fewer bedrooms.

Milwaukee, Wisconsin

On the flip side, some parts of the U.S. haven't seen a big run-up in home prices, and still offer opportunities for aspiring homeowners.

Milwaukee has seen some heavy interest in recent years from buyers seeking affordability, but prices still remain within reach.

Related: Brew City is also home to Harley - and America's hottest housing market

One condo that sold in July 2019 for $500,000 was recently sold again in January of this year for $590,000 - an 18% increase over six-and-a-half years. At that $500,000 price point, a buyer can still land a single-family home - an example of how the Midwest remains a bastion of affordability.

To be sure, in some cities, prices have stabilized and buyers are even scoring deals on new as well as existing homes, MarketWatch recently reported.

That's been happening in pandemic boomtowns where prices surged and then swung back dramatically, including Sun Belt cities such as Phoenix, Tampa, Fla., and Austin, Texas.

Since the pandemic home-buying boom went bust, "home buyers in Austin have the luxury of time and bargaining power," Andrew Vallejo, a Redfin Premier $(RKT)$ real-estate agent, said in a recent blog post.

"I have a buyer who just offered $560,000 for a home that was listed at $599,000 and a few years ago would've been worth $700,000," he said. "There's a pretty good chance the seller will say yes given how slow the market is."

Read more: 60% of home buyers paid below asking price in 2025. Here's where they found the best deals.

Home buyer says it was 'a battle' to buy a house within their budget

In Atlanta, 35-year-old Justin Floody saw firsthand how quickly the housing market has shifted in recent years, having bought his first and second properties in 2019 and 2024.

When he bought his one-bedroom condo in downtown Atlanta, he went in with a budget of $1,600 per month, and paid $257,000 for the place. Similar condos are now listed at $300,000, he said, based on Zillow listings.

In 2024, he decided to look for a single-family home with the goal of moving in with his then-girlfriend. Prices were a lot higher by then, so he had to look a little farther outside the city, and at houses that needed renovations. Between December 2019 and December 2024, the median home value in Atlanta jumped from $315,000 to $397,000, according to Zillow data.

Unlike Floody's relatively smooth experience in 2019, buying in 2024 was tough. "It was a battle to try to find anywhere that we could get within our budget," he noted.

Floody said that he wished they had bought two years earlier when mortgage rates were much lower, which would have meant a much lower monthly payment. Instead, he and his fiancée had to be "a little more frugal" when looking for homes in 2024.

In the end, they found a place for $425,000 and did a full gut renovation. It was recently appraised at $770,000.

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-Aarthi Swaminathan

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February 11, 2026 08:00 ET (13:00 GMT)

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