Real Home Price Growth Still Stable!


My biggest fear for housing in years 2020-2024 was that real home price growth would take off in an unhealthy way. This is why I cheered, and I will always hope for negative real home price growth on a year over year basis. This is something that happened last year for housing, which I wrote was very healthy for the U.S. housing market.

So far, we haven’t seen anything yet to make me concerned about this happening. I believe that Covid19 has taken away some of the juice in the housing market, which will prevent real home price growth from taking off like it did in in 2017. We don’t want housing to ever show nominal home price growth above 4.6%. I would keep an eye out this going out, but for now, we are ok. Higher mortgage rates do cool off home price growth, and as we all know, mortgage rates are meager now. With housing tenure at 10 years and the most significant housing demographic patch ever recorded in history here, we had the right backdrop for real home price growth to take off again. So far, so good.

As we can see below, what we saw from 2002-2005 looks nothing like what we saw from 2012-2020. This is why the Housing Bubble Boys have failed so badly in year 8 of their bubble crash calls.

From Doug Short:

August YoY real home price gains

August real home price growth

As always, Case-Shiller lags the current data, and we all know what the most recent data has shown.  Purchase application data is not only showing double-digit growth on a year over year basis, its showing 8 straight weeks of double-digit growth, something that never happened in 2018 or 2019.

Just the last 4 weeks here is too good for me to think it can sustain itself.

If we look back at the last 4-weeks. It’s average is running at 20.75% year over year growth. Don’t be surprised if this cools down in terms of rate of growth on a year over year basis. I keep on saying that, and so far, I have been wrong.


This chart from my brother from another mother, Len Kiefer from Freddie Mac, shows you why I am a big fan of seeing negative real home price growth for years. We are pushing the limits here with home prices and income.

June Percapit home price

Regarding the homeownership rate data that came out today. I wrote a piece for Housing Wire, and I will address the report there.

Is student loan debt really the barrier to Millennial homeownership?

Just two quick takes.

I don’t buy the headline number at all, this is well above my 66.21% forecast I made last year.

Q2 HO rates

However, as someone who has pushed the years 2020-2024 theme for many years, while you might not believe the Homeownership headline number today like I don’t, you do have to admit you’re shocked that housing is outperforming so much this year. Don’t forget, housing economics is driven by demographics and mortgage rates and not conspiracy theories.

Logan Mohtashami is a Lead Analyst for Housing Wire, financial writer, and blogger covering the U.S. economy with a specialization in the housing market. Logan Mohtashami, now retired, was a senior loan officer at AMC Lending Group, which has been providing mortgage services for California residents since 1987.