Inflation-adjusted home values are far below their 2006 peak, and achieving a new high could be tough to achieve in the new year
By Steven Russolillo | The Wall Street Journal
By one measure, the housing market’s lost decade is finally a thing of the past. In real terms, it is far from over.
U.S. home values in September topped their previous peak from a decade ago, according to the S&P/Case-Shiller 20-City Home Price Index. New data expected Tuesday should show more of the same in October. Prices have grown at about a 5% annual clip for much of the past two years.
On paper, home-price increases may have come full circle following the worst housing bust since the Great Depression. But these nominal price gains don’t take into account the consumer price increases that inflate home values over time. In real terms, the index still is about 16% below the 2006 high. A number of factors could make further price appreciation and possibly even a new inflation-adjusted high that much tougher to come by in the new year.