It has been 18 years since the bubble peak. In the March Case-Shiller house price index released on Tuesday, the seasonally adjusted National Index (SA), was reported as being 72% above the bubble peak in 2006. **However, in real terms, the National index (SA) is about 10% above the bubble peak **(and historically there has been an upward slope to real house prices). The composite 20, in real terms, is 1% above the bubble peak.

People usually graph nominal house prices, but it is also important to look at prices in real terms. As an example, if a house price was $300,000 in January 2010, the price would be $431,000 today adjusted for inflation (44% increase). That is why the second graph below is important - this shows "real" prices.

**The third graph shows the price-to-rent ratio, and the fourth graph is the affordability index. **The last graph shows the 5-year real return based on the Case-Shiller National Index.

**Nominal House Prices**

The first graph shows the monthly Case-Shiller National Index SA, and the monthly Case-Shiller Composite 20 SA in nominal terms as reported.

In nominal terms, the Case-Shiller National index (SA) and the Case-Shiller Composite 20 index (SA) are **both at all times highs**. Both indexes increased in February.

### Real House Prices

The second graph shows the same two indexes in real terms (adjusted for inflation using CPI).

**In real terms (using CPI), the National index is 2.2% below the recent peak**, and the Composite 20 index is 3.1% below the recent peak in 2022. Both indexes declined slightly in March in real terms.

In real terms, national house prices are 10.4% above the bubble peak levels. There is an upward slope to real house prices, and it has been 18 years since the previous peak, but real prices are historically high.

**Price-to-Rent Ratio **

## Keep reading with a 7-day free trial

Subscribe to CalculatedRisk Newsletter to keep reading this post and get 7 days of free access to the full post archives.