Latest News

Inflation Adjusted House Prices Declined in June

0

by Calculated Risk on 8/31/2022 11:13:00 AM

Today, in the Calculated Risk Real Estate Newsletter: Inflation Adjusted House Prices Declined in June

Excerpt:

It has been over 16 years since the bubble peak. In the Case-Shiller release yesterday, the seasonally adjusted National Index (SA), was reported as being 66% above the bubble peak in 2006. However, in real terms, the National index (SA) is about 16% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is about 7% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms (inflation adjusted). As an example, if a house price was $200,000 in January 2000, the price would be almost $339,000 today adjusted for inflation (69.5% increase). That is why the second graph below is important – this shows “real” prices (adjusted for inflation). …

The second graph shows the same two indexes in real terms (adjusted for inflation using CPI less Shelter). Note: some people use other inflation measures to adjust for real prices. In real terms, the National index is 14.6% above the bubble peak, and the Composite 20 index is 6.1% above the bubble peak in early 2006.

Note that real prices declined in June, with nominal prices increasing less than inflation.

There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/

UK train drivers at 12 rail companies to strike again on Sept 15 – union

Previous article

Goldman Sachs Expects ECB to Hike by 75bp in September

Next article

You may also like

Comments

Leave a reply

Your email address will not be published.

More in Latest News