...Untypical Cycle So Far Most cycles in the post-World War II period have been V-shaped, as usually housing helped power the economy out of recession. This time, housing started to improve well after the economy began its recovery, and the recovery has been much more moderate than typical. Four years into the recovery, housing metrics remain substantially below the former peak and meaningfully below the 30-year average. Affordability Still Positive Key issues that influence housing demand include home prices and home price inflation, trends in median household income and financing terms. During the current upcycle, which began in 2012 (and since 2000), median household income generally has been flat to slightly eroding (averaging $55,240). Median new home prices steadily rose to $305,000 currently and $282,800 in 2014 from $227,200 in 2011. Of course, the strength of the trade-up segment has inflated home prices. However, 30-year mortgage rates, which mostly trended downward for more than...
