The National Association of Realtors will not like this post, but home prices need to come down, and they will.
Even before the Covid-19 pandemic, home prices were on a trend that was unlikely to continue for long.
Median home price vs median household income is another measure that tells the same story.
Median household income series only dates to 1984 and is on an annual basis. The most recent data is for the end of 2018.
Both charts show very stretched valuations.
Home prices have outstripped hourly earnings, household income, and rent.
Massive Drop in Homebuyer Interest
On May 3, I commented Massive Drop in Homebuyer Interest.
That was not unexpected as Over 20 Million Jobs Lost As Unemployment Rises Most In History.
Job Losses Understated
Unfortunately, the unemployment are and job losses are hugely understated.