Home prices are going up but income and rent has gone up also at the same period of time. Below is a graph from Moody’s Analytics based on Celia Chen reporting.
Income you can measure between the first quarters of 2004 and 2013. Income is up 28 percent.
Rent is up 26 percent. But if we look at house prices from the first quarter of 2004 to 2013, we’ve just reached that 2004 price.
There’s no major increase since 2004. There were tremendous increases right before 2004. But from 2004 to today it’s flat compared to gains in income and rent.
Those are the things that economists look at to see whether or not properties are overvalued right now and they’re not.
Sean Young
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