Sometimes a picture has more than a thousand words, though only three are coming to mind right now…
The Yale economist Robert J. Shiller created an index of American housing prices going back to 1890. It is based on sale prices of standard existing houses, not new construction, to track the value of housing as an investment over time. It presents housing values in consistent terms over 116 years, factoring out the effects of inflation.
HFS indeed. That last bar covers the past ten years. Suddenly, I don’t feel bad at all about not owning a house, being in the market for a house, or worrying about a mortgage. That economic hard landing that economists are kicking around looks more and more like a mid-air explosion followed by a smoking crater in the ground.
Welcome to 2007, hope you survive.