Heather Long, formerly of CNN and late of The Washington Post, now the Chief Economist for Navy Federal Credit Union, tweeted out an interesting economic graph, showing the rate of increase in home prices during the last five years. She wrote:
The Case-Shiller US Home Price Index is up 52% since January 2020.
That’s great news for anyone who owns a home. But it’s onerous for anyone who wants to buy.
The typical mortgage cost is basically double now versus 2020. And that $330,000 home price in 2020 is now ~$500k.
Home prices have cooled a bit this spring. Many sellers are reducing prices a bit and offering incentives. But it’s barely moving the needle on the big picture of the past 5 years.
The problem with inflation is that it can be reduced or even halted — though the Federal Reserve Board’s target is for 2% inflation, not no inflation at all — but inflation normally creates its own baseline: while the rate of increase may slow, absent a serious recession, prices almost never drop to where they were prior to inflation, though they did due to the housing market crash, between 2007 to 2012. Continue reading





