So today at always must-read Mish, Mike Shedlock says that housing has peaked this cycle in New Home Prices: Are they Really Up this Year? Homebuilder Freebies: Reduced Closing Costs, Free Pools; Housing Has Peaked This Cycle. Is Mike Shedlock right? Not only is Mike right, but if only he knew by how much, he would be shocked.
According to the U.S. Department of Commerce, Census Bureau, median sales price for new houses sold in the USA hit a peak at US$285,600 at the end of April, 2014. The median sales price for new houses sold is up US$23,000 from the previous peak hit at the end of February, 2007.
According to those at Zillow, the median sale price for all houses, new and used, came in at US$207,000 at January 2008 and for August 2014, US$215,000. The median sale price for all houses, new and used, is up US$8,000.
By percent priced in U.S. dollars, median prices for new houses sold are up 8.8% over the last seven and a quarter years, rising at an annual rate of 1.2%. For all houses, new and used, median prices have risen 3.9% over the last seven years, rising at one-half of one percent (0.5%) a year.
Should anyone be wowed over this? All prices get denominated in cash. In the seven years since peak credit of Q4 2007, cash is up a whopping 62.6%, rising at an annual rate of 7.2%. Federal Reserve buying units are up 103.4% since peak credit Q4 2007, rising at an annual rate of 10.7%.
True prices tell a different story. The true median price for new and used houses sold has fallen a whopping -48.6% falling at an annual rate of -9.1% a year over the last seven years.
In true prices, peak median price for new houses sold came at the end of Q4 2006. The true median price for new houses sold has fallen an eye-blackening -47.1% falling at an annual rate of -7.9% a year over the last seven and three-fourths years.
Nothing has changed in the greatest depression of all-time.