{"id":385343,"date":"2026-01-03T11:32:34","date_gmt":"2026-01-03T11:32:34","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/385343\/"},"modified":"2026-01-03T11:32:34","modified_gmt":"2026-01-03T11:32:34","slug":"inflation-adjusted-house-prices-2-7-below-2022-peak","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/385343\/","title":{"rendered":"Inflation Adjusted House Prices 2.7% Below 2022 Peak"},"content":{"rendered":"

It has almost 20 years since the housing bubble peak, ancient history for many readers!<\/p>\n

In the October Case-Shiller house price index<\/a> released Tuesday, the seasonally adjusted National Index (SA), was reported as being 78% above the bubble peak. However, in real terms, the National index (SA) is about 9.7% above the bubble peak (and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 1.1% above the bubble peak.<\/p>\n

Note on inflation: Due to the government shutdown, inflation data for October is not available. This calculation uses the average price data for September and November to arrive at a value for October.<\/p>\n

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the price would be $448,000 today adjusted for inflation (49% increase). That is why the second graph below is important – this shows “real” prices.<\/p>\n

The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. The last graph shows the 5-year real return based on the Case-Shiller National Index.<\/p>\n

The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA in nominal terms as reported.<\/p>\n

\"\"<\/a><\/p>\n

In nominal terms, the Case-Shiller National index (SA) and the Case-Shiller Composite 20 index (SA) both increased in October, and both are about 0.3% below the all-time highs set in February 2025. <\/p>\n

The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).<\/p>\n

In real terms (using CPI), the National index is 2.7% below the recent peak, and the Composite 20 index is 3.0% below the recent peak in 2022.<\/p>\n

\"\"<\/a><\/p>\n

Both the real National index and the Comp-20 index increased in October. This was the first increase in the real National index has in 10 months.<\/p>\n

It has now been 41 months since the real peak in house prices. Typically, after a sharp increase in prices, it takes a number of years for real prices to reach new highs (see House Prices: 7 Years in Purgatory<\/a>). There is nothing magic about \u201c7 years\u201d, it just made a good post title!<\/p>\n

My initial guess on house prices<\/a> was \u201cmostly flat prices nationally in 2025\u201d which would suggest a slight decline in real prices. The increase in inventory is putting downward pressure on house prices, combined with an increase in inflation, and real house prices have declined about 2% in 2025.<\/p>\n

In real terms, national house prices are 9.7% above the bubble peak levels. There is an upward slope to real house prices, and it has almost 20 years since the bubble peak, but real prices are historically high.<\/p>\n

The following content is for paid subscribers only. Thanks to all paid subscribers!<\/p>\n","protected":false},"excerpt":{"rendered":"It has almost 20 years since the housing bubble peak, ancient history for many readers! In the October…\n","protected":false},"author":2,"featured_media":385344,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,101],"class_list":{"0":"post-385343","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385343","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=385343"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/385343\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/385344"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=385343"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=385343"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=385343"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}