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.
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.
Stop The Housing Bailout: Send a Letter to Congress
Other housing bubble resources:
Blogs
- Bubble Meter - A leading housing bubble blog, Blogspot
- Realty Check with Diana Olick, CNBC
- The Housing Bubble, TheHousingBubbleBlog
- Hot Property, BusinessWeek
Video
- Real Estate Roller Coaster (Fun!), SpeculativeBubble.com, 4/2/2007
- Real Estate Bubbles, Part 1, Department of Economics, Humboldt State University, 11/30/2006
- Real Estate Bubbles, Part 2, Department of Economics, Humboldt State University, 11/30/2006
- Real Estate Bubbles, Part 3, Department of Economics, Humboldt State University, 11/30/2006
- Housing Bubble Interview, First Business Morning News, 11/3/2006
- Princeton Economist Paul Krugman on the Housing Bubble, The Bloomberg Report, 9/10/2006
- Economics Roundtable: Housing Boom or Bubble?, University of California, San Diego, 4/3/2006
- Bubbles (Stocks & Housing) and How You Can Protect Yourself, CEPR, 11/10/2005
Economic Analysis
- 2007 Housing Bubble Update: 10 Economic Indicators to Watch, CEPR, 2/2007
- The Menace of an Unchecked Housing Bubble, CEPR, 3/30/2006
- Will a Bursting Bubble Trouble Bernanke?, CEPR, 11/8/2005
- That Hissing Sound, The New York Times, 8/8/2005
- The Housing Bubble Fact Sheet, CEPR, 7/2005
- The Global House Price Boom, International Monetary Fund, 9/2004
- When Bubbles Burst, International Monetary Fund, 4/2003
Data sources and methodology:
- Latest quarterly, median, existing, single-family home price provided by the National Association of Realtors.
- Trailing house price index data provided by Standard & Poors (1987-Present), the Federal Housing Finance Agency (1975-1986), and Freddie Mac (1970-1974).
- Inflation data provided by the Federal Reserve Bank of Cleveland (1977-Present) and the Bureau of Labor Statistics (1970-1977).
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.