Economy: Inflation Adjusted Housing Prices

Inflation-Adjusted Housing Prices show that housing prices don’t “always go up” giving an unbiased look w/o inflation clouding the picture.

Source: Inflation Adjusted Housing Prices

For most of the 20th century, inflation adjusted home prices remained mostly steady. Remarkable, isn’t it?

Real estate has been a hedge against inflation – as each dollar became worthless due to monetary expansion, home prices went up to reflect that each dollar was worth less.

You can see the bubble in the pre-2008-2010 economic depression, followed by a return to the long-term trend. But then the Fed continued with cheap money for far too long, enabling very low-cost loans to excessively increase demand.

The public health pandemic response destroyed the economy and the government stepped again to dramatically increase the money supply, repeating the process.

This suggests home prices are set to fall sharply and return to the long-term trend line.

Related: Why inflation is out of control?: “80% of All US Dollars in Existence Have Been Printed in Just the Last Two Years” – Coldstreams

(Note – some will argue “But the Fed doesn’t print money” which is true – what it does is expand or shrink the money supply which has the same effect.)