Members of Generation Z might struggle to remember a time when the US housing market prices were doing anything other than rising exponentially, but sure enough, there have been times in history when this has been the case.
The financial crisis of 2007 was one of them. Some people are wondering if the US housing market is going through something similar now — but is it a fair comparison?
With increases in average wages way behind, it’s no wonder that many people have concerns about the growing affordability crisis.
Could we find ourselves in the middle of a housing crisis once the market catches up?
To answer this question, let’s take a quick look at how the property market has performed historically.
It’s true that US housing market prices tend to trend upward over time; we all need a roof over our heads, so there will always be a steady supply of people looking to purchase properties.
However, the growth rates of average prices during 2020 and 2021 were way above the average growth rate of 5.3%.
While drops in house prices are fairly unusual (especially sustained drops or “crashes”), they do happen.
Even precious metals, which typically do well when the stock market performs poorly, are struggling — gold has fallen from a value of $2,039 per ounce in March to $1,834 in May, representing a drop of 10% in just two months.