Historical nationwide median house prices?

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meme_IHB

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Hi, does anyone here know of a source where I could find nationwide median house prices for the last 60+ years?



I'd like to graph the ratio of housing prices to income over time, supposedly home prices have varied between 2x and 3x median family income (until now), but I'd like to actually see the data on this. This would show how far prices are still out of whack nationwide, and it would also be interesting to compare this graph to other things, like interest rates, to see if there is any correlation.



I've found a source on median family incomes since 1945, but can't find the same for home prices. Any idea where to look for this?



I've looked all over census.gov, the data doesn't appear to be there. There's this

http://www.census.gov/hhes/www/housing/census/historic/values.html, but it only shows prices every 10 years (see the unadjusted values halfway down the page).
 
Median Incomes

.............US.............California.... Irvine

2006 $47,423 $53,690 $83,891

2005 $46,326 $51,755 $82,827

2004 $44,334 $49,222 $80,520

2003 $43,318 $49,300 $75,141

2002 $42,409 $47,437 $72,289

2001 $42,228 $47,626 $71,821

2000 $41,990 $46,816 $72,057

1999 $40,696 $43,629 $68,170

1998 $38,885 $40,934 $63,959

1997 $37,005 $39,694 $62,022

1996 $35,492 $38,812 $60,644

1995 $34,076 $37,009 $57,827

1994 $32,264 $35,331 $55,205

1993 $31,241 $34,073 $53,239

1992 $30,636 $34,903 $54,536

1991 $30,126 $33,664 $52,600

1990 $29,943 $33,290 $52,016

1989 $28,906 $33,009 $51,577

1988 $27,225 $30,287 $47,323

1987 $26,061 $30,146 $47,103

1986 $24,897 $29,010 $45,328

1985 $23,618 $26,981 $42,158

1984 $22,415 $25,287 $39,511

1983 $20,885 $25,695 $40,148

1982 $20,171 $24,738 $38,652

1981 $19,074 $23,781 $37,157

1980 $17,710 $22,823 $35,662

1979 $16,461

1978 $15,064

1977 $13,572

1976 $12,686

1975 $11,800
 
The Case Schiller graph doesn't show actual housing prices, it displays an inflation adjusted index which uses 100 to represent the starting point, not of any help for this purpose.



And, Irvine Renter, I've already got the incomes (going back to 1945), I was looking for house prices.
 
[quote author="meme" date=1243180376]The Case Schiller graph doesn't show actual housing prices, it displays an inflation adjusted index which uses 100 to represent the starting point, not of any help for this purpose.



And, Irvine Renter, I've already got the incomes (going back to 1945), I was looking for house prices.</blockquote>


Okay... first, I do appreciate your idea and what you want to achieve here. You have a great idea, and I want to help you succeed in it. So forgive me for the snark you will find below.



Second, you have heard of google, right? While it took me more than just a few minutes, <a href="http://www.census.gov/const/priceregq.pdf">I was able to find this in less than ten minutes</a>. A full on census bureau chart, complete with national as well as regional data for median and national average sales prices. I know my googlefu skills are better than most, but this was really not that difficult to find. I also recommend you <a href="http://www.nber.org/chapters/c8820.pdf">read this paper on median home prices</a>.



Third, comparing median income to median home prices is useless unless you factor in interest rates. For historical interest rates <a href="http://mortgage-x.com/">click here</a>. You take the median home price, factor in 20% down, and see what the percentage of income it takes to afford a home. <a href="http://www.realestateeconomics.com/v1/">Mark Boud of RE Economics</a> uses this equation, even though he saw it rise above 60% in 2006 for OC and saw it as a moderate problem, despite the 90s barely breaching 40%. Don't get me started with his Q2 of 08 will have the highest foreclosures prediction either. He has been notoriously wrong, so bad I dunno why people pay for his useless data.



Now that you have the data, get to work! If you want OC data, and you can't find it via google, I might help you... if you give me a cool chart from this info I gave you and a thanks or five.
 
[quote author="graphrix" date=1243185943][quote author="meme" date=1243180376]The Case Schiller graph doesn't show actual housing prices, it displays an inflation adjusted index which uses 100 to represent the starting point, not of any help for this purpose.



And, Irvine Renter, I've already got the incomes (going back to 1945), I was looking for house prices.</blockquote>


Okay... first, I do appreciate your idea and what you want to achieve here. You have a great idea, and I want to help you succeed in it. So forgive me for the snark you will find below.



Second, you have heard of google, right? While it took me more than just a few minutes, <a href="http://www.census.gov/const/priceregq.pdf">I was able to find this in less than ten minutes</a>. A full on census bureau chart, complete with national as well as regional data for median and national average sales prices. I know my googlefu skills are better than most, but this was really not that difficult to find. I also recommend you <a href="http://www.nber.org/chapters/c8820.pdf">read this paper on median home prices</a>.



Third, comparing median income to median home prices is useless unless you factor in interest rates. For historical interest rates <a href="http://mortgage-x.com/">click here</a>. You take the median home price, factor in 20% down, and see what the percentage of income it takes to afford a home. <a href="http://www.realestateeconomics.com/v1/">Mark Boud of RE Economics</a> uses this equation, even though he saw it rise above 60% in 2006 for OC and saw it as a moderate problem, despite the 90s barely breaching 40%. Don't get me started with his Q2 of 08 will have the highest foreclosures prediction either. He has been notoriously wrong, so bad I dunno why people pay for his useless data.



Now that you have the data, get to work! If you want OC data, and you can't find it via google, I might help you... if you give me a cool chart from this info I gave you and a thanks or five.</blockquote>


Unfortunately, this linkhttp://www.census.gov/const/priceregq.pdf is not what I'm looking for. This is from census.gov's Construction section, and it's a list of the prices of new houses. New homes are more expensive than existing homes, of course, so it wouldn't be the data I'd want to use. Also, it only goes back to 1963, although this would have been a substantial start if it were existing home prices, or more probably a combination of new and existing home prices.



One of the points of doing this is to find out whether it's useful to compare median income to median home prices without factoring in interest rates. The question is, is there a correlation between the ratio of home price to income and mortgage interest rates? I think there likely is not, but I could certainly be wrong.
 
[quote author="meme" date=1243217838][quote author="graphrix" date=1243185943][quote author="meme" date=1243180376]The Case Schiller graph doesn't show actual housing prices, it displays an inflation adjusted index which uses 100 to represent the starting point, not of any help for this purpose.



And, Irvine Renter, I've already got the incomes (going back to 1945), I was looking for house prices.</blockquote>


Okay... first, I do appreciate your idea and what you want to achieve here. You have a great idea, and I want to help you succeed in it. So forgive me for the snark you will find below.



Second, you have heard of google, right? While it took me more than just a few minutes, <a href="http://www.census.gov/const/priceregq.pdf">I was able to find this in less than ten minutes</a>. A full on census bureau chart, complete with national as well as regional data for median and national average sales prices. I know my googlefu skills are better than most, but this was really not that difficult to find. I also recommend you <a href="http://www.nber.org/chapters/c8820.pdf">read this paper on median home prices</a>.



Third, comparing median income to median home prices is useless unless you factor in interest rates. For historical interest rates <a href="http://mortgage-x.com/">click here</a>. You take the median home price, factor in 20% down, and see what the percentage of income it takes to afford a home. <a href="http://www.realestateeconomics.com/v1/">Mark Boud of RE Economics</a> uses this equation, even though he saw it rise above 60% in 2006 for OC and saw it as a moderate problem, despite the 90s barely breaching 40%. Don't get me started with his Q2 of 08 will have the highest foreclosures prediction either. He has been notoriously wrong, so bad I dunno why people pay for his useless data.



Now that you have the data, get to work! If you want OC data, and you can't find it via google, I might help you... if you give me a cool chart from this info I gave you and a thanks or five.</blockquote>


Unfortunately, this linkhttp://www.census.gov/const/priceregq.pdf is not what I'm looking for. This is from census.gov's Construction section, and it's a list of the prices of new houses. New homes are more expensive than existing homes, of course, so it wouldn't be the data I'd want to use. Also, it only goes back to 1963, although this would have been a substantial start if it were existing home prices, or more probably a combination of new and existing home prices.



One of the points of doing this is to find out whether it's useful to compare median income to median home prices without factoring in interest rates. The question is, is there a correlation between the ratio of home price to income and mortgage interest rates? I think there likely is not, but I could certainly be wrong.</blockquote>


Why do you think there is not a correlation between price and mortgage interest rates, especially when linking it to incomes? Aren't interest rates substantial enough to affect the monthly cost for the majority of buyers? When I was a kid my mom did RE on the side and she LOVED it, but she wasn't one to understand macro-economics (she was so disappointed when I told her that I was going to get my BA in ECON instead of something "interesting) so just before rates rose to 18% she decided to quit her day job and do RE full time.



She got deals done, but they were mostly facilitated through assumables and/or owner carrying a portion of it. Assumable loans seem to have gone the way of the dinosaurs, so these wouldn't be an option for most sellers today. Still, even when that was an option, this was a period of my life when I was one of the kids with the coupon for the free lunch at school.



My biggest fear as a knife catcher is interest rates rising rather than the rest of the 2005 and 2006 buyers' houses coming on the market as short sales or foreclosures. Maybe in the high end mortgage rates don't have as much of an affect, but I would think for the properties that the 90% of the population buy, the monthly cost matters and the only way 90% have to buy a home is via a mortgage.
 
[quote author="StudLee" date=1243408818]IR



What is your source on that data?</blockquote>


The US Census Bureau had the US data. I forget where I found the other. It may have been there as well.
 
[quote author="stepping_up" date=1243420550]Why do you think there is not a correlation between price and mortgage interest rates, especially when linking it to incomes? </blockquote>


Because since 2002 that correlation was out the window (maybe longer than that), and Meme is trying to make some sense of this liquidity fueled insanity.
 
[quote author="no_vaseline" date=1243421636][quote author="stepping_up" date=1243420550]Why do you think there is not a correlation between price and mortgage interest rates, especially when linking it to incomes? </blockquote>


Because since 2002 that correlation was out the window (maybe longer than that), and Meme is trying to make some sense of this liquidity fueled insanity.</blockquote>


I get it now, but the guidelines changed in later '07 and progressively more so since then. I really think the low rates today are one of the biggest driving factors of not keeping the below $729K market from plunging much further and giving the below $500K market a perception of a floor. In fact, it's not necessarily a correlation of rates for the 2002-2007 period, rather it's a correlation of financing options avaible, isn't it?
 
I've been making that point for years, only to get yelled at "it's a new world order, the metrics don't matter anymore". So, yeah, I agree.
 
[quote author="stepping_up" date=1243420550]



Why do you think there is not a correlation between price and mortgage interest rates, especially when linking it to incomes? </blockquote>


The first graph is mortgage interest rates over the past 45 years, the 2nd is inflation adjusted housing prices, taken from the well known NYT article graph. (Link to the full NYT graphhttp://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html)



Note that there is no correlation at all. (And note that each graph is covering the same number of years, so just imagine that the bottom one is twice as wide as it is pictured here)



<img src="http://i43.tinypic.com/2d1qlo6.jpg" alt="" />



<img src="http://i43.tinypic.com/35hi6vm.jpg" alt="" />
 
[quote author="meme" date=1243217838][quote author="graphrix" date=1243185943][quote author="meme" date=1243180376]The Case Schiller graph doesn't show actual housing prices, it displays an inflation adjusted index which uses 100 to represent the starting point, not of any help for this purpose.



And, Irvine Renter, I've already got the incomes (going back to 1945), I was looking for house prices.</blockquote>


Okay... first, I do appreciate your idea and what you want to achieve here. You have a great idea, and I want to help you succeed in it. So forgive me for the snark you will find below.



Second, you have heard of google, right? While it took me more than just a few minutes, <a href="http://www.census.gov/const/priceregq.pdf">I was able to find this in less than ten minutes</a>. A full on census bureau chart, complete with national as well as regional data for median and national average sales prices. I know my googlefu skills are better than most, but this was really not that difficult to find. I also recommend you <a href="http://www.nber.org/chapters/c8820.pdf">read this paper on median home prices</a>.



Third, comparing median income to median home prices is useless unless you factor in interest rates. For historical interest rates <a href="http://mortgage-x.com/">click here</a>. You take the median home price, factor in 20% down, and see what the percentage of income it takes to afford a home. <a href="http://www.realestateeconomics.com/v1/">Mark Boud of RE Economics</a> uses this equation, even though he saw it rise above 60% in 2006 for OC and saw it as a moderate problem, despite the 90s barely breaching 40%. Don't get me started with his Q2 of 08 will have the highest foreclosures prediction either. He has been notoriously wrong, so bad I dunno why people pay for his useless data.



Now that you have the data, get to work! If you want OC data, and you can't find it via google, I might help you... if you give me a cool chart from this info I gave you and a thanks or five.</blockquote>


Unfortunately, this linkhttp://www.census.gov/const/priceregq.pdf is not what I'm looking for. This is from census.gov's Construction section, and it's a list of the prices of new houses. New homes are more expensive than existing homes, of course, so it wouldn't be the data I'd want to use. Also, it only goes back to 1963, although this would have been a substantial start if it were existing home prices, or more probably a combination of new and existing home prices.



One of the points of doing this is to find out whether it's useful to compare median income to median home prices without factoring in interest rates. The question is, is there a correlation between the ratio of home price to income and mortgage interest rates? I think there likely is not, but I could certainly be wrong.</blockquote>


All logic says they would correlate, yes? I have seen the charts and the analysis, and the odd thing is that re prices and interest rates do not correlate, inversely or otherwise. If you search hard enough, you will find the comparison. Sorry I can not point you in the right direction, as it was too long ago that I saw the data.







I would be interested to see the same comparison charts on an inflation adjusted basis. My guess is that the correlation would show statistical relevancy. IMO, as interest rates rise in the next couple of years, home prices will continue downward, buy maybe only in real dollars, not in nominal dollars. I think it will depend on whether or not price inflation translates into wage inflation. It is very possible that it will not. Lots of variables, eh?
 
[quote author="meme" date=1243445733]Note that there is no correlation <strong>at all</strong>.</blockquote>
Not necessarily:

<img src="http://www.edgeworld.com/ihb/comparegraph.jpg">



As you can see, there does seem to be an inverse relationship with interest rate and prices if you look at the peaks and valleys.



I would also think there are other factors that need to be considered such as number of sales and qualification guidelines for financing. You will probably see more correlation with those items.
 
I definitely see the correlation during that early '80's era I referred to earlier. However, those super high rates were an extreme, so perhaps if it's just a matter of a few percentage points difference in rates, there may not be a correlation to prices.
 
[quote author="irvine_home_owner" date=1243468481][quote author="meme" date=1243445733]Note that there is no correlation <strong>at all</strong>.</blockquote>
Not necessarily:

<img src="http://www.edgeworld.com/ihb/comparegraph.jpg">



As you can see, there does seem to be an inverse relationship with interest rate and prices if you look at the peaks and valleys.



I would also think there are other factors that need to be considered such as number of sales and qualification guidelines for financing. You will probably see more correlation with those items.</blockquote>


You cheated! You offset the housing prices graph by a couple years to make it look like the peak in the middle on one graph and the valley on the other happened at the same time.



Regardless, there still is not a correlation. This was the only time in the combined graph where there strongly appeared to be an inverse relationship, as everyone tends to assume there is. In the early years, you have low interest rates and low housing prices, at the end you have housing prices shooting way up while interest rates go down a little and then way down while interest rates go down a little more.



During parts of the graph, interest rates and housing values seem to be going up and down together, during other parts there seems to be an inverse relationship. Combine it all, you get no correlation.
 
[quote author="meme" date=1243473570]You cheated! You offset the housing prices graph by a couple years to make it look like the peak in the middle on one graph and the valley on the other happened at the same time.

</blockquote>
Whoah homeslice... check your eyes... I did exactly what you said and expanded the graph so it matches up better. It's not exact (I'm not a PhotoShop expert) but it's pretty close. Now looking at it more closely, I could have moved the interest rate overlay to the left a bit but that still would show the same pattern.

<blockquote>

Regardless, there still is not a correlation. This was the only time in the combined graph where there strongly appeared to be an inverse relationship, as everyone tends to assume there is. In the early years, you have low interest rates and low housing prices, at the end you have housing prices shooting way up while interest rates go down a little and then way down while interest rates go down a little more.



During parts of the graph, interest rates and housing values seem to be going up and down together, during other parts there seems to be an inverse relationship. Combine it all, you get no correlation.

</blockquote>
Actually... I disagree... if you combine it all, you see the overall relationship better. The only part that doesn't look right is the current boom/fall but we've already stated that was more due to loose financing guidelines rather than actual interest rate to price comparisons.



You honestly don't see a correlation? Wow... this must be one of those 3d puzzles where I'm not seeing what other people are.
 
Look at the fact that the "low" housing prices at the valley in the middle of the graph are the same as the prices at the beginning of the graph, and the same as the prices after the 80's boom peak.



In fact, what looks like a valley in the middle of graph for housing prices is not a valley at all, it's just the normal price range which happens to be taking place between the peaks of two housing booms. It corresponds with a peak of insanely high interest rates, which should have led to historically low housing prices, if there really were an inverse relationship between interest rates and housing prices. But it didn't, the historically high interest rates merely correspond with average housing prices.



Here are some longer scale graphs, hopefully should be illustrative:



<img src="http://i39.tinypic.com/vne5ud.jpg" alt="" />



<img src="http://i40.tinypic.com/34hb0iq.jpg" alt="" />
 
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