It has been over 17 years since the bubble peak. In the January Case-Shiller house price index released yesterday, the seasonally adjusted National Index (SA), was reported as being 71% 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 $427,000 today adjusted for inflation (42% 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 January.

### 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 2.4% below the recent peak**, and the Composite 20 index is 3.3% below the recent peak in 2022. Both indexes were mostly flat in January in real terms.

In real terms, national house prices are 10.2% above the bubble peak levels. There is an upward slope to real house prices, and it has been over 17 years since the previous peak, but real prices are historically high.

**Price-to-Rent Ratio**

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