Where are we in the Real Estate cycle?
Dig into the Data
1. Median U.S. Home Price ÷ M2 Money Supply
This chart compares the median U.S. home price to M2, which is a broad measure of the money supply. In
M2 = Liquid Money; includes cash, checking deposits, savings deposits, money market funds.
When home prices are divided by M2, we are asking: how expensive is housing relative to the total amount of money circulating in the economy? Over the past 60 years, this ratio has generally trended lower, which suggests that home prices have not risen as dramatically as the overall supply of money. There are still clear peaks and valleys, such as the 2006 housing bubble, the 2008–2012 reset, and the 2020–2022 pandemic boom, but the broader takeaway is that housing does not look historically extreme when compared to the expansion of the money supply.
If you read the news you are misinformed. if you ignore it you are uninformed. So, look at data and come to your own conclusions.
This chart compares the median U.S. home price to M2, which is a broad measure of the money supply. In
M2 = Liquid Money; includes cash, checking deposits, savings deposits, money market funds.
When home prices are divided by M2, we are asking: how expensive is housing relative to the total amount of money circulating in the economy? Over the past 60 years, this ratio has generally trended lower, which suggests that home prices have not risen as dramatically as the overall supply of money. There are still clear peaks and valleys, such as the 2006 housing bubble, the 2008–2012 reset, and the 2020–2022 pandemic boom, but the broader takeaway is that housing does not look historically extreme when compared to the expansion of the money supply.
1. Median U.S. Home Price ÷ M2 Money Supply
Dig into the Data
If you read the news you are misinformed. if you ignore it you are uninformed. So, look at data and come to your own conclusions.
This chart compares the median U.S. home price to M2, which is a broad measure of the money supply. In
M2 = Liquid Money; includes cash, checking deposits, savings deposits, money market funds.
When home prices are divided by M2, we are asking: how expensive is housing relative to the total amount of money circulating in the economy? Over the past 60 years, this ratio has generally trended lower, which suggests that home prices have not risen as dramatically as the overall supply of money. There are still clear peaks and valleys, such as the 2006 housing bubble, the 2008–2012 reset, and the 2020–2022 pandemic boom, but the broader takeaway is that housing does not look historically extreme when compared to the expansion of the money supply.
1. Median U.S. Home Price ÷ M2 Money Supply
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