The Housing Market: Prices, Rates and Crashes Since 1987
The housing market is the buying and selling of homes, measured here by the S&P Cotality Case-Shiller national home price index. From Jan 1987 to Jul 2026 that index was below its year-earlier level for a year or more only twice, in 1990-91 and from 2007 to 2012, when it dropped 27.42% from peak to low.
The housing market runs on monthly data that arrives about two months late, not on a daily closing price. This page measures it from the national price index and the weekly mortgage-rate survey, back to 1987 and 1971, and shows what a housing crash has looked like in that record.
How it works
Prices are set one sale at a time. There is no exchange and no closing price. A national figure has to be built from recorded sales, and the one used on this page is the S&P Cotality Case-Shiller U.S. National Home Price Index, as published on FRED.
It is slow. FRED’s series page shows the Jul 2026 value posted on 30 Sep 2026, about two months after the month it describes, so the index trails what buyers and sellers see on the ground. The version used here is not seasonally adjusted: it rose in each of April, May and June in 38 of the 40 years on record, and fell in December in 23 of 39.
Rates set the monthly cost. A fixed-rate mortgage payment depends on the loan size and the rate. Freddie Mac’s weekly survey of the 30-year fixed rate is the public measure used here. When rates rise, the same loan costs more each month, and the same monthly budget supports a smaller loan.
Supply is slow too. Homes take a long time to plan and build, so the number of homes responds slowly to a change in demand. In this record the two long price falls ran for 14 and 62 straight months below the year-before level, not for weeks.
A worked example
Take a hypothetical $300,000 30-year fixed loan and the payment formula P = L x r / (1 - (1 + r)^-360), where r is the yearly rate divided by 12.
- At 2.65%, the survey’s record low on 7 Jan 2021, the monthly payment is $1,208.89.
- At 7.28%, the survey rate on 1 Oct 2026, the same loan costs $2,052.64 a month, 69.79% more.
- Prices moved too. The national index rose 42.69% from Jan 2021 to Jul 2026, so a loan scaled up by the same amount is $428,084.08. At 7.28% that costs $2,929.00 a month.
- Against the Jan 2021 payment, that is 142.29% more for a loan on a home the index says is the same.
The mortgage payment calculator runs the same formula with your own numbers.
The original data
The Case-Shiller national index, 475 months from Jan 1987 to Jul 2026. It stood at 63.732 in Jan 1987 and 337.306 in Jul 2026, up 429.26%. Consumer prices rose 198.75% over the same months, so after inflation the index is up 77.15%. These are the values FRED carried on 2 Oct 2026. Its 30 Sep 2026 update also changed 295 earlier monthly values, none by more than 0.25 index points, so a later download can differ slightly.
The 2006-2012 fall. The index peaked at 184.608 in Jul 2006 and bottomed at 133.987 in Feb 2012, a fall of 27.42% over five and a half years. It first got back to the old high in Jan 2017, at 184.627. Divided by the consumer price index, the real peak was May 2006 and the real low Feb 2012, a fall of 35.93%, and the real index did not pass its 2006 high until Mar 2021.
How often prices were lower than a year before. Of the 463 monthly readings from Jan 1988 to Jul 2026, 78 were below the same month a year earlier. They came in three stretches: 14 months from Nov 1990 to Dec 1991, 62 months from Mar 2007 to Apr 2012, and two months, Apr and May 2023. The steepest 12-month fall was -12.75% in Feb 2009 and the steepest rise +20.77% in Mar 2022. The latest reading in the 2 Oct 2026 download, Jul 2026, is +1.93%.
The monthly index, its inflation-adjusted version and the monthly mortgage-rate average are in the Case-Shiller file.
Mortgage rates since 1971
Freddie Mac’s survey has 2,897 weekly readings from 2 Apr 1971 to 1 Oct 2026. The high was 18.63% on 9 Oct 1981 and the low 2.65% on 7 Jan 2021. After that low the rate climbed to 7.79% on 26 Oct 2023. In 2026 it has ranged from 5.98% on 26 Feb to 7.28% on 1 Oct, the latest reading when this page was checked on 2 Oct 2026.
The 2006-2012 fall came without a rise in rates. In Jul 2006, the month the price index peaked, the weekly rate averaged 6.76%. All 291 weekly readings from Aug 2006 to Feb 2012 were below that, so the price fall ran while borrowing got cheaper, and it overlapped a recession rather than a rate spike. Every weekly reading is in the mortgage-rate file.
Recessions and home prices
FRED’s NBER-based indicator marks four recessions inside the index’s history. Measured from the month before the first recession month to the last one, the national index moved:
| recession months | index change |
|---|---|
| Aug 1990 to Mar 1991 | -3.13% |
| Apr 2001 to Nov 2001 | +4.93% |
| Jan 2008 to Jun 2009 | -13.58% |
| Mar 2020 to Apr 2020 | +1.89% |
Two of the four saw prices rise. A slowing economy and a housing fall have overlapped, but the record does not treat one as a stand-in for the other.
When it fails
One national number hides local markets. The index averages the whole country. A city can fall while the national figure rises, and the reverse, so the national line says little about any one street.
The index is late. A reading appears about two months after its month, so a turn shows up in the data well after it has started in listings and offers.
The rate survey changed method. On 17 Nov 2022 Freddie Mac began basing the weekly rate on applications submitted to it by lenders, per the series notes on FRED, so readings before and after that date are not built the same way.
Price is not return. The index tracks prices only. It leaves out rent saved or earned, and it also leaves out upkeep, property tax, insurance and the cost of buying and selling. The real estate page breaks those parts out.
Two big falls is a small sample. Since 1987 the index has had two long declines, and they were very different in length, 14 and 62 months. That is not enough to put odds on the next one.
Related
Mortgage explains how the loan side compounds, and real estate covers the returns from owning property beyond the price. Real estate vs stocks sets the two side by side, and recession explains the NBER dating used in the table above.
Price the monthly payment before the house. Run the loan at today’s mortgage rate and again two points higher, and only look at listings that still fit the budget on the higher number.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money.