Today’s Chart of the Day is data from Case-Shiller Adjusted Home Price, charted by Mish. The chart shows the increase in home prices based on Fannie Mae 30-year mortgage rates from 1988, when the index began, to today.
In 1988, the average adjusted home price was $150,000. Today the value is $707,000. This results in an annual increase of 4.4%.
The average mortgage payment in 1988 was $1,076 and is now $3,662, an annual increase of 3.5%.
For comparison, inflation over that same time beat both at an annual 4.6%. However, growth of home prices does not put a price on the “utility” (aka benefits) received over that same time, that being a roof over your head and walls to keep you safe.
One can also see from looking at this chart that mortgage payments are back to normal versus the value of homes, and perhaps the anomaly stemmed from the artificially low rates after the Great Recession.