The housing bubble is bursting and home prices are falling!

Here are graphs of inflation-adjusted, historical home prices.


Historical house prices graph

The above chart estimates the market value of today's median-priced house over a 34-year period.

The red line represents real house prices. For those unfamiliar with economic-speak, "real" prices are prices that have been adjusted for inflation. The blue line represents nominal house prices.

Notice that in the 25-year period from 1975 through 1999, real existing house prices stayed roughly within the range of $125,000 to $160,000, with an average during this period of $143,850. The United States median price was $169,000 as of the first quarter of 2009.

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For an annualized graph depicting over a century of inflation-adjusted U.S. housing prices based on Yale University economics professor Robert Shiller's data, click here.


View housing price graphs for major metropolitan areas:


I blog about declining housing prices at The Bubble Meter Blog.




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Other housing bubble resources:

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Economic Analysis

Data sources and methodology:

The chart on this page estimates the market value of today's median-priced house over time. The trailing nominal prices are derived by taking the recent median price of existing single-family homes, as reported by the National Association of Realtors, and discounting it by the S&P/Case-Shiller Home Price Index. From 1975 through 1986, the FHFA House Price Index is used. From 1970 through 1974, the Freddie Mac Conventional Mortgage Home Price Index is used. The S&P/Case-Shiller HPI, FHFA HPI, and Freddie Mac CMHPI are "constant quality" indices, so even though houses are built larger today than they were many years ago, this graph automatically adjusts for this variation. The trailing inflation-adjusted prices are then derived by adjusting the nominal prices by the CPI-U Research Series Using Current Methods. Prior to Q4 1977, the CPI - All Items Less Shelter is used.

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Housing charts and spreadsheets are in the public domain. You are free to copy and modify them.

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