US house prices
Our interactive guide to America’s housing market
JUST seven years after the biggest housing bubble in American history began to deflate, could another be swelling up? Prices in a 20-city index compiled by Standard & Poor’s rose 11% in the year to the end of March 2013, and more than 20% in Phoenix and Las Vegas, both cities at the centre of the housing collapse. To determine whether there are bubbles popping up somewhere, The Economist applied to 20 metropolitan areas the same the analysis it uses each quarter in 20 countries: we compare the ratio of prices to household income and rents against their long-run average.
The verdict: in most markets houses are near or above their long-run values, but none looks bubbly. Price rises in Phoenix, Tampa and Miami have restored values only to their long-run averages. In Las Vegas they are still below that long-run average. Many things could trip up the housing recovery, from stalling job growth to higher mortgage rates; at the moment, a bursting bubble is not one of them.
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This interactive chart allows readers to compare the ups and downs of America’s 20 main housing markets tracked by Standard & Poor’s. The data begin in 1987 for 14 cities, extending to 20 from 2000 onwards. The Economist has augmented the index by comparing the data against household income and housing rents. There are five different measures in total:
• House-price index – rebased to 100 at a selected date and in nominal terms only.
• Prices in real terms – again rebased to 100 for the selected date, but the index is deflated by consumer prices to take account of the effects of inflation on purchasing power.
• Prices against average income – compares house prices against median incomes in each city, rebased to 100 at the selected date.
• Prices against rents – compares the relationship between the costs of buying and renting, rebased to 100 at the selected date.
• Percentage change (in real terms) – shows the increase or decrease in real prices between two selected dates.
The data presented are quarterly, aggregated from monthly indices. When comparing data across cities, the interactive chart will only display the range of dates available for all the cities selected. The metropolitan areas for which rent and income data were available did not always correspond precisely to the areas for home prices; in those cases, we chose the closest spatial area. Median household income data are only available to November 2012. We have extrapolated the data to March 2013 based on the 12-month trend growth rate.