charts_and_numbers

Why U.S. Homes Feel Pricier: House Prices vs. Income (1985–2025)

0xbitcoiner

It is 2025 and we have just crossed a line that nobody thought possible. Inflation-adjusted home prices have now climbed past every historical bubble in the United States.  

Back in 2006 at the peak of the housing mania the index stood at 266.4. Everyone knows what happened after that. The market imploded millions of homeowners were caught underwater and it took years to recover. Today we are not only matching that peak we are sitting closer to 300 inflation adjusted. That is unprecedented territory and it should make anyone paying attention stop and think.  


When asset prices are rising faster than both incomes and employment stability you are not looking at a healthy housing market. You are looking at a speculative fever. The problem with speculative fever is that it always feels good at the top and yet by definition it cannot last. What follows is determined by how much risk people have taken on when reality catches up.  
