Since 1960, US property values have generally increased in real terms, meaning even after adjusting for inflation, homes are more expensive today than they were decades ago. However, there have been periods of decline during economic recessions and housing market corrections.
Here's
a breakdown of the general trends:
· 1960s: Median home
prices rose by almost 60% during this decade. The median home cost $11,900 in
1960, which was 2.1 times the median income.
· 1970s: Home prices
surged, driven partly by inflation, despite increasing interest rates.
· 1980s: This decade
saw slower and more modest growth in home prices. Median prices reached around
$50,000 by 1989 (approximately $120,000 in 2024 dollars), but high interest
rates (peaking over 16% in 1981) made homeownership challenging for many. A
recession in the early 1990s also led to a decline in real home prices.
· 1990s: Home prices
generally saw strong growth, fueled by declining interest rates. The median
home price increased by 30.1% during this decade.
· 2000s: Further
declines in interest rates continued to fuel home price growth. However, a
significant turning point occurred with the housing bubble and the Great
Recession between 2007 and 2009. Median housing prices declined by nearly 20%
during this period, with some areas seeing even steeper drops.
· 2010s: Following
the Great Recession, the housing market experienced a period of recovery and
expansion. However, home prices have continued to rise at a faster pace than
wages, making affordability a growing concern.
· 2020s: Record-low mortgage rates in the early 2020s led to rapid home price appreciation, with an annual increase of 19.5% in Q1 2022. However, rising rates have since caused a slowdown in growth. Home prices have increased by 47.1% in just the first 50 months of this decade.
Key
takeaways:
· While there have been
periods of decline, the overall trend since 1960 is one of significant
appreciation in US property values, outpacing wage growth.
· Recessions and
financial crises, like those in the early 1990s and the Great Recession of
2008-2009, have resulted in drops in home prices.
· Interest rates, economic conditions (employment, inflation), and the balance between housing supply and demand are key factors influencing property values.
US property value drops from 1960 to present
Since 1960, US property values have experienced significant increases over the long term, but also experienced periods of decline and stagnation.
Here's
a breakdown of the general trends:
· Overall
Growth: Despite the fluctuations, the long-term trend for US home values
has been upwards. The average home price in the US, for example, grew from
around $140,000 to about $340,000 between 2003 and April 2023, according to
Nasdaq. The Zebra notes that the inflation-adjusted cost of a 1960
median house would be $104,619 in 2020 dollars, while the actual median cost in
2019 was $240,500, a 129% increase.
· Periods of Decline and
Stagnation:
o 1980s: Home sales
declined significantly in the early 1980s.
o Early 1990s: A
recession led to a decline in home prices.
o 2006-2012 (The Great
Recession): Housing prices experienced a sharp decline during and after
the 2008 financial crisis, according
to The Washington Post. The average home value in the US fell by about 33%,
almost eliminating gains experienced between 2003 and 2006.
· Recent Trends
(post-2012): Following the Great Recession, a boom period for housing
began, with home values rising significantly, particularly between
2020-2022, according
to Nasdaq.
The COVID-19 pandemic also spurred increases in housing costs, especially in
suburban areas, according to the Madison Trust Company.
In
summary, while there have been periods of decline and stagnation, US
property values have shown a strong upward trend over the past six decades,
with notable increases in the last decade.
https://www.google.com/search?q=us+property+value+drops+from+1960+to+present
Comments
In 1965, I assumed a $16.000 30-year mortgage at 4% interest by paying $750 in back taxes on a home in St. Charles County Mo. I sold it in 1975 for $36,000 after doing major upgrades. My house payment was $150/month
In 1975, I purchased a home for $55,000 in Salina Kansas with a 30-year mortgage at 6%. My downpayment was $20,000. I sold it for $85,000 in 1983 although it was appraised for $104,000 My house payment was $300/month.
In 1983, I purchased a home in Dunwoody GA for $137,000 with a 30-year mortgage at 13%. My downpayment was $40,000. My house payment was $1400/month. In 1985 I refinanced the mortgage with a 30-year mortgage at 10% and my house payment remained at $1400/month. In 1986. I refinanced the mortgage with a 15-year mortgage at 7%. In 2001, we paid off the mortgage. We did major upgrades and continue to live in this home.
The goal of home ownership is to create inter-generational wealth for our kids and allow them to pay off their own mortgages early. Families who own homes can provide shelter to family members to avoid homelessness.
Norb Leahy, Dunwoody GA Tea Party Leader
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