A new analysis by CoreLogic shows that home prices are unlikely to surpass 2006 levels until 2023 or beyond, writes The Wall Street Journal reporter Lauren Kusisto.
The number may surprise some analysts, as home prices have been growing at twice the rate of wages. But most other indices that watch home prices, the S&P/Case-Shiller Home price Index, for instance, does not take into account inflation.
“The rise and fall in prices without adjusting for inflation matter for existing homeowners because they determine whether or not they are underwater on their mortgages,” Kusisto writes.
Though prices are still far from peak, the slow recovery of new construction compared to demand has helped drive prices up despite tight credit.
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