The Housing Boom: Home Prices Outpaced Income Gains
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The document summarizes trends in US house prices and disposable income from 1990 to 2017. It shows that from 1990 to 2006, house prices grew much faster than disposable income, with the largest divergence occurring between 1998 and 2006. However, during the Great Recession, house prices dropped dramatically, falling by over 17% between 2006 and 2009, while disposable income continued growing. Since the recession, house prices and income have both increased, though house prices still have not returned to pre-recession growth rates relative to income.
The Housing Boom: Home Prices Outpaced Income Gains
- 1. DataPost Federal Reserve Bank of San Francisco Education & Outreach The Housing Boom Home Prices Outpaced Income Gains Date last updated: December 8, 2017
- 2. -20 -15 -10 -5 0 5 10 15 20 1990 1994 1998 2002 2006 2010 2014 House Prices and Disposable Income Year-over-Year Percent Change, through 2017:Q3 DataPost CoreLogic National House Price Index Disposable Personal Income Sources: CoreLogic & Bureau of Economic Analysis www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
- 3. -20 -15 -10 -5 0 5 10 15 20 1990 1994 1998 2002 2006 2010 2014 DataPost CoreLogic National House Price Index Disposable Personal Income Sources: CoreLogic & Bureau of Economic Analysis Annotated Chart Notes House Prices and Disposable Income Year-over-Year Percent Change, through 2017:Q3 Income across U.S. households, less taxes paid A data series that tracks single-family residential home values across the U.S. = 100 x (2017:Q3-2016:Q3) 2016:Q3 2009:Q1 -17.2% 2006:Q2 House Prices = 9.4% Disposable Income = 7.1% www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach
- 4. What Do You Think? 1. What happened to the growth rates of disposable income and house prices from 1992:Q3 to 1993:Q3? 2. Between 1990 and 1997, which grew faster: disposable income or house prices? 3. Between 1998 and 2006, which grew faster: disposable income or house prices? 4. What was the percentage point difference in house price growth between the peak in 2005 and the bottom in 2009? 5. How would you describe the trends in house prices and disposable income since the Great Recession ended? DataPost Learn more about house prices during the Great Recession at FRBSF.org www.frbsf.org/education/teacher-resources/datapost FRBSF Education & Outreach