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Home Prices Through the Cycle

2000 to Pre-crisis Peak to Great Recession Trough to Current


HPI Price Walk Since 2000: Since 2000, the U.S. housing market has seen unprecedented movements in Home Prices.

2000 to Peak: Home prices more than doubled; rising 11.2% annually.

Peak to Trough: Decline of 35%, or (7.6)% annually.

Trough to Current: Home prices surging again - and have finally recovered all price losses; home prices have risen at 6.3% rate annually since trough. And home price appreciation has generally slowed.

Peak to Current: Home prices surpass prior peak by 6%.

Trends in Yearly Home Prices: Significant rises in home prices prior to Great Recession. Significant declines in home prices during Great Recession. Strong bounce-back spike in home prices followed by moderate price gains.

Recently, Home price appreciation has slowed significantly. YoY change in home prices: 2.0%.

Trends In Housing Prices Compared to Consumer Prices: Pre-recession price run-up steady and accelerated prior to peak. This rise was followed by steep and sustained period of decreasing home prices. Finally, there was a stubbornly long and slow descent to the final bottom. In recent years, average home values have carried out another upward progression at a consistently faster rate than the CPI inflation measure.

MSA Housing Prices Year-over-Year: Year-over-year home price increases varied dramatically by market and diverging from the U.S. average of 2.0%. Phoenix market was up 6.3%, San Francisco ended its price rise and is now down 0.1% from one year ago. Five metro areas had lower home price increases than the U.S. average. And four metro areas doubled the U.S. average.

Home Price Changes 2000 to Peak

Home Price Changes Peak to Trough

Home Price Changes Trough to Current

Home Price Changes from Peak to Current

Housing prices - trends by price tiers

Housing Price Tiers: An interesting and important statistic for assessing housing prices is to observe the changes in home prices by price tier (as measured here by S&P Case Shiller).

While there are differences in the patterns across each MSA, in general, the Low Tier (lowest one-third of home sales in that MSA by sale price) shows much more dramatic movements - both up and down. And, most recently, there is much more rapid price increases in this tier.

Home Prices Through the Cycle

2000 to Pre-crisis Peak to Great Recession Trough to Current


Low Sales Price Tier Year-over-Year Price Performance:

Atlanta showed nearly 10% YoY price increase.

Two MSAs have YoY price increases of 8% or more: Tampa, and Phoenix.

Seven MSAs have YoY price increases between 4% - 8%: Minneapolis, Chicago, New York, Boston, Seattle, Washington, D.C. and Las Vegas.

Denver, Portland, Los Angeles, San Diego, Miami, and San Francisco had price increases less than 4%.

Home Price Changes 2000 to Peak

Home Price Changes 2000 to Peak

Home Price Changes Peak to Trough

Home Price Changes Peak to Trough

Home Price Changes Trough to Current

Home Price Changes Since Pre-crisis Peak

Housing Price Trends Across Metropolitan Markets

Regional Home Prices: Upper right quadrant reflects high priced MSAs that are also experiencing above average home price appreciation.

Home Price Appreciation Relative to CPI: Home prices in three MSAs have failed to keep up with inflation (CPI as measure). Large variation in performance across these MSAs.

Homeowner Equity and Negative Equity: As reported by CoreLogic, nationally homeowner negative equity has been steadily declining since the Great Recession. And recently, it has begun to level out. However, there are various metropolitan markets that continue to reflect higher levels of negative homeowner’s equity.

This chart is interesting - and reminds us that real estate is local, not national. While the issue of negative equity has lessened on average nationally, it remains an issue locally in certain markets.

In the Miami market, 9.5 percent of homeowners with mortgages still have negative equity fully a decade after the Great Recession.

In Chicago, 7.8 percent of homeowners with a mortgage are underwater.

What are the implications for housing prices? for Existing Home Sales?

Housing Affordability Across Metropolitan Markets

Regional Home Affordability: Upper left quadrant reflects MSAs showing above average home affordability based upon NAHB's Housing Opportunity Index - percentage of homes affordable at MSA median income. The lower right quadrant reflects lesser affordability.

Regional Population Growth: Many of the MSAs with higher home prices and lower home affordability are also experiencing above average population growth. This is one of several factors influencing home price increases.

Regional Housing Affordability Viewing housing affordability based upon Home P/E ratio (median home price divided by median family income) and NAHB Housing Opportunity Index in scatter plot isolates affordable (lower right quadrant) and less affordable (upper left quadrant).

Housing Affordability - Home Purchase: Viewing housing affordability from broad perspective - housing prices as multiple of family income, we can see the dramatic differences across various MSAs in the cost to "acquire" a home. National housing affordability statistics mask the true story conveyed by MSA level data.

Economic Factors and Impact on Housing Prices

Housing Prices and Job Growth: While the direction of housing prices are impacted by a variety of factors, there does appear to be a close correlation to job growth as shown in latest 3 months change in non-farm payroll.

Housing Prices and Unemployment Rate:  The direction and level of the unemployment rate bears a reasonably close correlation to changes in home prices.