JP's Real Estate Charts

Real Estate Charts

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

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When I first noticed the U.S. housing bubble in spring of 2001, I never imagined it would last as long or get as big as it did. Real estate activity peaked in the summer of 2005, but home prices kept rising for another year. In spring of 2006, I couldn't believe that real estate prices were still rising even though housing inventories were also rising. Therefore, at a time when many people denied the existence of a housing bubble, I created these real estate charts in an effort to warn people that they were over-paying for real estate.

Over a dozen years after I first noticed the housing bubble and many years after I first created these real estate charts, the U.S. national housing bubble had nearly completely deflated. Since the beginning of 2012, however, a new housing bubble has been rapidly forming in the western United States—especially in California.

This site aims to inform people about the current state of the real estate market with inflation-adjusted charts and spreadsheets showing today's real estate prices compared to their historical norm.

Inflation-adjusted house prices

Graph of historical house prices

The above chart estimates the market value of today's median-priced house over a 40-year period, thus controlling for the fact that housing sizes have changed over time. The thick red line represents real house prices. For those unfamiliar with economic terminology, "real" prices are prices that have been adjusted for inflation. The thick blue line represents nominal house prices. The thin lines represent the pre-bubble (1970-1999) trend lines.

Nominal house prices compared to owner-equivalent rents

Graph of home prices vs. rents

This chart shows the change in nominal home prices vs. the change in nominal rents since 1983. Over the long run, home prices and rents should increase at roughly the same rate.

Inflation-adjusted mortgage rates

Graph of inflation-adjusted mortgage rates

This chart shows the real (inflation-adjusted) cost of a 30-year conventional mortgage since 1971.

The investment performance of real estate investment trusts (REITs)

This chart shows the investment performance (total return) of real estate investment trusts (REITs) since 1996. This graph is not inflation-adjusted.