The Housing Market Historically, housing prices have gradually and consistently increased over time. The graph below shows the quarterly median sales price of houses sold in the U.S. from 1963 through 2022. Housing prices generally increase, although exceptions have occurred. A slight dip in prices occurred during the recessions of 1982 and 1991 and the economic slowdown of 2019. Most notably, prices declined significantly during the financial crisis of 2008. Although housing prices generally increase, beginning in 2020 and continuing through the summer of 2022 the rate of price increases was historically high. Note the steepness of the curve beginning in 2020. Between the first quarter of 2020 through the second quarter of 2022, the quarterly median sales price increased approximately 42%. The percentage increase in prices over those ten quarters nearly matched the percentage increase that occurred over the entire last decade. Between the first quarter of 2010 and the fourth quarter of 2019, the quarterly median sales price increased approximately 47%. Quarterly Median Sales Price of Houses Sold in the United States, 1963–2022 (Source: U.S. Census and HUD via Federal Reserve Economic Database)
The graph below shows the supply of houses available for sale from March 2018 through March 2023. Generally, the active listings for houses declined significantly beginning in early 2020. Low mortgage rates, combined with relatively low housing inventory, helped fuel the rapid increase in home prices between the first quarter of 2020 and second quarter of 2022. Housing Supply: Active Listings March 2018–March 2023 (Source: Realtor.com, retrieved from FRED, Federal Reserve Bank of St. Louis)
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Center for Business and Economic Insight
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