True, but the last 10 years have been very atypical.
Historically, housing prices track the inflation rate pretty closely. This makes sense, because the housing market is dependent on having new (young) buyers moving in to the market as the older homeowners move up (or out). The way housing is priced now, many young buyers are priced out of the market. In the short term, that problem was solved with various 'exotic' mortgages that let people buy houses they couldn't afford -- the market needed buyers to keep prices artificially high. And the high prices brought in housing speculators, which was a pretty new phenomenon. And we know what happened next.
The housing market needs to decline or be stagnant for something like 20 years to bring prices back to where they should be. Anyone expecting big gains in the price of housing over the next 10-20 years is deluding themselves.
Historically, housing prices track the inflation rate pretty closely. This makes sense, because the housing market is dependent on having new (young) buyers moving in to the market as the older homeowners move up (or out). The way housing is priced now, many young buyers are priced out of the market. In the short term, that problem was solved with various 'exotic' mortgages that let people buy houses they couldn't afford -- the market needed buyers to keep prices artificially high. And the high prices brought in housing speculators, which was a pretty new phenomenon. And we know what happened next.
The housing market needs to decline or be stagnant for something like 20 years to bring prices back to where they should be. Anyone expecting big gains in the price of housing over the next 10-20 years is deluding themselves.
