On one hand, it looks like the national Case-Shiller Index is up about 40% since the previous peak (above).
But after adjusting for inflation, Bill shows how home prices are about the same as before:
https://calculatedrisk.substack.com/p/real-house-prices-price-to-rent-ratio
You could say that home prices have only been tracking inflation over the last 10-12 years.
Has the frenzy over the last 12 months just added the annual 2% to 3% increase to home pricing that we’ve always assumed over the last decade, but didn’t realize due to inflation? Could be!
I wonder if incomes have also kept up with inflation during this same time period?
It is good to see Bill McBride migrating to Substack. That said it was the mid 2000s when I had to basically force him to abandon unadjusted home prices. Partial success there. In addition to “median prices” you also have to adjust for “median amenities.” Case Shiller made this same mistake. They went back to 1890 but didn’t adjust for size, baths, electrical, plumbing, etc.