Home Price Calculation Notes

Case-Shiller measures repeat sales of the same home over time.

Case-Shiller is a much better, but less timely measure than median or average home price. However, the measure lags. Recent data is through May representing sales in February, March, and April.

The price above reflects the increasing value of the Case-Shiller index over time.

Mortgage Payment and Mortgage Rate

The above chart represents the mortgage payment of the same house as the lead chart reflecting the changing price and interest rate over time.

Price, Mortgage Rate, Mortgage Payment Over Time, Same House

The $150,000 home purchased in January 1988 had a mortgage payment of $1,076 reflecting a mortgage rate of 10.38 percent.

In 2006, the home was worth about $403,634 up and the mortgage payment was $2,086 reflecting a mortgage rate of 6.52 percent.

If you bought at the end of 2020 when the Fed clobbered interest rates to a record low of 2.68 percent, that same home that cost $150,000 in 1988 would have cost $502,649. However, due to Fed "affordability" magic, the mortgage payment was only $1,605. Thank you Fed!

However, if you want to buy now (May 2024) that $150,000 1988 home will set you back a mere $707,499. Your mortgage payment would be $3,662 at a mortgage rate of 7.06 percent. Oops and Ouch!

It's Worse Than Described Above

Mortgage rates are slightly higher in practice.

Also, prices do not include property taxes or insurance.