How Have Home Prices Changed Since 1925?


Quick Answer

Even when accounting for inflation, average home prices are currently significantly more than double what they were in 1925, as suggested by a study performed by Yale professor Robert Shiller. This number does not, however, account for the increase in home sizes over the past 90 years.

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Full Answer

House prices have not steadily risen over the past 100 years, but instead have seen different periods of rising and falling prices. The year 1925 was in the midst of a recession that was followed by the second World War. This meant that housing prices in 1925 were some of the lowest that generationhad ever been. Following the end of the war in 1945, there was an economic and housing boom that led to house prices rising above pre-recession levels. However, construction inventions such as the cordless drill made construction costs go down and even with an increase in house size, house prices remained relatively the same up until the 1980s.

The second housing boom occurred in the early 2000s. Whereas in the 1990s house prices did not keep up with inflation, in the 2000s the prices skyrocketed. After the 2000s, housing prices dropped again but were still over twice as highas they were in 1925.

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