The standard public framing of the post-1990 American economic experience for the working and middle class is a wage-stagnation framing. The framing is incomplete. Real median household income in the United States rose from $65,440 in 1990 to $82,690 in 2023, measured in constant dollars, a 26% real increase over 33 years.[1] Real median weekly wages rose 19% between 1985 and early 2025. For workers with college degrees, the gains were larger; for workers in tech, finance, and healthcare, individual earnings often exceeded inflation by wide margins. American wages have grown.
For most American households, the squeeze comes from the cost side of the ledger. Wages rose; housing, healthcare, and education costs rose several times faster. Median household income rose 26% in real terms over 33 years; median home prices in the highest-immigration metro areas rose 47% to 199% in real terms over the same period. The gap between those two trajectories is the post-1990 cost-of-living crisis. The gap opened because roughly 33.5 million foreign-born residents concentrated into 20 metro areas that did not expand housing supply to match.
Wage Data
Real median household income in the United States rose from $65,440 (1990) to $82,690 (2023), measured in constant dollars.[1] Real median weekly earnings of full-time workers rose 19% between 1985 and 2025.[1] The figures are not consistent with the public characterization of post-1990 wage stagnation as the central economic problem facing American workers.
Wage growth was concentrated at the upper end of the distribution. The bottom-quartile worker saw smaller real gains; college-educated and credentialed professional workers saw larger gains. The post-1990 distribution shifted upward in real terms across most measured cohorts.
The Cost Explosion in Immigration Metros
The 20 metro areas with the highest foreign-born populations account for a disproportionate share of the national cost-of-living crisis. The pattern is consistent: the higher the immigrant concentration, the steeper the cost increase.
| Metro | Foreign-Born % | Median Home (1990) | Median Home (2025) | Nominal | After inflation |
|---|---|---|---|---|---|
| San Jose | 39% | ~$350,000 | ~$1.6M | +357% | +87% |
| San Francisco | 35% | ~$286,000 | ~$1.3M | +355% | +86% |
| Miami | 54% | ~$90,000 | ~$660,000 | +633% | +199% |
| Los Angeles | 34% | ~$220,000 | ~$950,000 | +332% | +76% |
| New York | 37% | ~$180,000 | ~$650,000 | +261% | +47% |
| Seattle | 22% | ~$140,000 | ~$800,000 | +471% | +133% |
Prices roughly two and a half times over between 1990 and 2025, so the nominal column overstates the change by about four times. The right comparison is the last column, and it is still stark: a home in San Jose costs 87% more in real terms than it did in 1990, while one in Cleveland costs 31% more over the same 35 years under the same national inflation.[11]
The 1990 figures are estimates rather than Census medians. They are back-cast from the Zillow Home Value Index using the FHFA House Price Index ratio for each metro area, which is a constant-quality series and can diverge from a Census median by roughly 15% in fast-growing metros.
Over the same period, real median household income rose 26%. Housing in these metros rose 47% to 199% in real terms, on the same inflation adjustment. The gap between those two numbers is the cost of concentrating 33.5 million additional people in areas that did not build enough housing to absorb them.
From 2000 to 2020, median rents rose faster than median household income in 88% of U.S. counties, home to 97% of the U.S. population.[6] The phenomenon is national but the severity concentrates in the metros where immigrants settle.
The San Jose Problem
San Jose shows the pattern in its purest form.
In 1990, Santa Clara County was 22.9% foreign-born.[3] The median home cost $343,000.[4] A family earning the county's median household income of roughly $85,000 faced a price-to-income ratio of 4.1x. A 20% down payment was $70,000 - achievable in a few years of saving.
By 2025, the county is 39% foreign-born.[3] The median home costs $1.6 million.[4] The median household income is $150,000 - nearly double what it was. The price-to-income ratio is 10.7x. A 20% down payment is $320,000. A household saving $2,000 per month needs 13 years to accumulate it. Most never start.
The income nearly doubled, but the price-to-income ratio more than doubled against them. A family making twice as much money is further from homeownership than a family making half as much was a generation ago.
Local wages rose over this period, yet home prices rose far faster, because 30% of Santa Clara County's population arrived after 1990, primarily through the H-1B visa program and chain migration, and the county did not build 30% more housing to accommodate them.[3]
The Rent Trap
The cost-of-living crisis does not only affect homebuyers. It affects renters first and worse.
National median gross rent rose from $571 in 1990 to over $1,200 in 2023.[6] In the highest-immigration metros, the numbers are far steeper. Miami rents rose 53% between 2020 and early 2026 alone, from $1,725 to $2,645.[7] San Jose one-bedroom rents exceed $2,800. San Francisco exceeds $3,000.
A 25-year-old engineer earning $85,000 in San Jose takes home roughly $5,300 per month after taxes. A one-bedroom apartment costs $2,800. That is 53% of take-home pay on housing alone. The rule of thumb for affordable housing is 30%. At 53%, there is no margin for saving, no path to a down payment, and no prospect of buying a home in the city where they work.
The same engineer in 1990, adjusted for inflation, earned less but spent a smaller share of income on housing. The rent-to-income ratio in San Jose was roughly 25% in 1990. It is now above 50%. The engineer's standard of living fell despite earning more money.
Why This Is an Immigration Problem
The cost-of-living crisis has multiple causes. Zoning restrictions limit construction. Interest rates affect mortgage affordability. Institutional investors buy single-family homes. All of these matter.
But the demand side of the equation is driven overwhelmingly by population growth. When a metro area adds hundreds of thousands of residents through immigration over 35 years and does not add a proportional number of housing units, rents and prices rise. That is arithmetic.
The 20 highest-immigration metros absorbed the majority of the 33.5 million foreign-born residents added since 1990.[3] Those same 20 metros have the highest housing costs, the worst rent-to-income ratios, and the steepest cost-of-living increases in the country. Adding hundreds of thousands of residents to a fixed housing stock drove prices and rents up in exactly the places that absorbed the most immigrants.
A study by Gonzalez and Ortega found that a 1% increase in a state's immigrant population corresponds to a 1% increase in housing rents.[8] In high-demand metros, the effect is amplified: a 1% population increase can correspond to a 9.6% increase in housing prices.
San Jose's foreign-born population grew by roughly 30 percentage points since 1990. Apply even a conservative version of the Gonzalez-Ortega finding and the result is a housing market that no middle-class family can afford.
Why the Diagnostic Matters
The wage-stagnation framing produces a different policy menu than the cost-of-living framing. Wage-stagnation policy responses include minimum-wage increases, union-strengthening legislation, child-care subsidies, and student-loan forgiveness. Each is a transfer or supply-side intervention aimed at increasing the income side of the household budget. None addresses the cost side that is producing the actual squeeze.
The median American household earning $82,690 is not in a minimum-wage situation. The household is earning meaningfully above the federal poverty line and above the historical median in real terms. The structural problem the household faces is that the metro it lives in costs 4 to 7 times what it cost in 1990 to acquire shelter, while the household income roughly doubled. Income-side interventions cannot close that gap.
The cost side, in the high-impact metros, is driven by the demand-supply mismatch produced when 33.5 million foreign-born residents concentrated in 20 metro areas without proportional housing supply expansion. The 1924 Immigration Act addressed an analogous mismatch by cutting annual admissions 80%, from an average of 879,540 a year across 1901 to 1910 to 177,852 a year across 1925 to 1965. The four-decade period that followed produced the largest sustained native-born wage growth and homeownership expansion in American history. The same approach is available now: hold the rate of population growth to a level that housing supply can match.
Recommendations
Federal immigration policy controls the demand side of the housing market, and the 1990 Act is what drove that demand up.
- Repeal and replace the Immigration Act of 1990 and cut annual legal admissions by at least half, concentrating the cut on family-preference and chain-migration categories. Return toward the 1924-to-1965 level of roughly 200,000 a year to slow demand in San Jose, San Francisco, Miami, Los Angeles, New York, and Seattle, where home prices rose 47% to 199% in real terms while real incomes rose 26%.
- Replace the H-1B with a sub-10,000 exceptional-talent visa with a salary floor above the local 95th percentile, and eliminate OPT. Roughly 30% of Santa Clara County's residents arrived after 1990, driving its price-to-income ratio from 4.1x to 10.7x.
- Cut rental demand alongside purchase demand. High rents (53% of take-home pay for a San Jose engineer at $2,800 a month) block saving for a down payment. Miami rents rose 53% between 2020 and 2026. Both markets respond to the same lever.
Sources
- Census Bureau, "Income in the United States: 2023," Real Median Household Income
- EPI, "Wage Stagnation in Nine Charts"
- Migration Policy Institute, "Frequently Requested Statistics on Immigrants and Immigration"
- Zillow Home Value Index (ZHVI), Metro-Level Data, 2025
- Economic Policy Institute, "H-1B Visas and Prevailing Wage Levels," Daniel Costa and Ron Hira, 2020
- U.S. Treasury, "Rent, House Prices, and Demographics"
- RentCafe, Miami Rent Trends, 2020-2026
- Gonzalez and Ortega, "Immigration and Housing Booms: Evidence from Spain," Journal of Regional Science, 2013
- Joint Center for Housing Studies, Harvard University, "Median Home Price-to-Income Ratio Reaches Record High"
- Bureau of Labor Statistics, Foreign-Born Workers: Labor Force Characteristics, 2024
- U.S. Bureau of Labor Statistics, CPI-U annual averages - prices rose about 2.45x between 1990 and 2025; 1990 metro prices are back-cast from Zillow ZHVI using FHFA metropolitan index ratios and are constant-quality estimates, not Census medians