Home prices have never stopped appreciating, except 2008
Here’s the 100-year graph of home prices.
Apart from the period just following The Great Recession of 2008, home prices have been essentially increasing for the last 100 years.
Summary: Home prices are resilient, very resilient!
The housing market is still red hot
Home prices continue their strong upward climb - they have grown 14.6% over the past year according to the S&P Case-Shiller Home Price Index. Mercifully for homebuyers, mortgage rates have also declined. Mortgage purchase applications are also up a whopping 8.2% over the past week, but are down by 10.5% on a year-on-year basis. After their crazy climb over the last few months, lumber prices have declined steeply (more on this in the next section).
Seems like lumber isn’t loved anymore
Marcy Nicholson of Bloomberg reports that lumber prices have now dropped 50% since hitting a record high in May of this year. In Eye On Housing, David Logan explains why prices paid by builders for lumber remain high despite the price drop.
Millennials will continue buying homes, and a lot of them
Odeta Kushi of First American posits that the Covid-19 pandemic accelerated millennial demand for homeownership, and that this demand will fuel the housing market in the 2020s. However, the homeownership rate for millennials continues to underperform on its potential, primarily on account of a historically low supply of homes for sale.