Let’s look at how US home prices changed

 

The chart shows quarterly HUD data for actual selling prices

For sales in Q2 2014, the average price was $288,000. Ten years later in Q2 2024 it was $426,800, a 48.2% increase. 

That was actually down a bit from the Q4 2022 peak, when the average selling price was $442,600, a 53.7% increase in 8½ years. 

Notice, however, when most of the gains occurred. Home prices zoomed higher in the COVID era, gaining 39.6% in the 2½ years from Q2 2020. 

I think the COVID-driven monetary and fiscal stimulus was a much bigger factor. The Fed’s easy policy made borrowing cheap while other programs put cash in people’s pockets. 

Consumer goods spending boosted profits at many businesses. This led to higher salaries, bonuses, and stock prices. A small number of business owners and executives ended up with a lot of extra money, some of which went to buying new homes. 

Naturally, prices rose.

A similar trend unfolded in rental properties. 

Homeownership became “the American Dream” in the post-WW2 period

The ratio of home prices to household income.

The period spanning roughly 1960–2000 was a golden era of home affordability

A large group of low-mortgage homeowners bought or refinanced in that short window when you could get a 3% fixed rate or even less. Selling now would mean buying something else at a much higher rate.  

Today, 74% of Boomers own their homes.

John Mauldin 18 October 2024

https://www.mauldineconomics.com/frontlinethoughts/frozen-homes

RE: And soon their children will inherit it.

Tillbaka till Wall Street och Stockholm 19-20 oktober 2024

https://englundmacro.blogspot.com/2024/10/wall-street-och-stockholm-19-20-oktober.html