October House Prices Surpass 2006 Housing Bubble

The Case-Shiller National Index and Composite 20 index both reached all-time highs at 48% above the housing bubble peak and 35% above the bubble peak, respectively. When adjusted for inflation over the 15 year period since the last housing peak, the National index is 10.4% above peak prices, while the Composite 20 index is just 0.9% higher than rates in early 2006.

The recent price-to-rent ratio also revealed a record high gain, though index estimates also suggest that homes currently on the market are somewhat affordable due to low mortgage rates, reports Bill McBride in the CalculatedRisk Newsletter.

In nominal terms, the Case-Shiller National index (SA) and the Case-Shiller Composite 20 index (SA) are both at new all-time highs (above the bubble peak). The National Index is 48% above the bubble peak, and the Composite 20 index is 35% above the bubble peak.

In real terms, house prices are now above the previous peak levels. There is an upward slope to real house prices, and it has been over 15 years since the previous peak, but real prices appear historically high (Of course interest rates are very low).

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