…you have about broken even relative to the consumer price index. The Case-Shiller National Index for March 1987 was 62.03; for March 2013, it was 136.70. The Consumer Price Index in March 1987 was 112.7; in March 2013 it was 232.77. So the Case-Shiller Index has risen by 120.4 percent in 26 years; the CPI has risen by 106.5 percent. So in inflation adjusted terms, the average house in the average place has risen by 13 percent over the past 26 years, or a little less than half of one percent per year.
[At the suggestion of Austin Kelly, I looked to see what would happen if I used the unit-weighted FHFA index instead of the value-weighted Case-Shiller index. I found that based on FHFA, real house prices rose by 11 percent since 1991 (the first year for which data are available), or a little less than .5 percent per year. So even though the index is different, the result is the same.]
Reposted from Forbes.
