That’s easy to say. The housing market during the Great Depression was the worst since the Great Depression. Granted, it’s unlikely that we’ll see inflation-adjusted national home prices (CPI-U Less Shelter) rise as much as they did from 2006 to 2012, at 37 percent.

But perhaps in the 2020s we will see real estate prices crash like the previous two real estate busts. Here’s how those seasons compare to today — and what might happen next.

1977-1982, The Great Inflationary Housing Bubble: Real inflation-adjusted home prices nationally rose 18 percent in the first three years, then fell 10 percent in the next three years. From 1978 to 1982, the number of existing and new single-family homes sold dropped 50%. At the bottom of 1982, real prices returned to 1977 levels.

In the year By the late 1970s, baby boomers were hitting first-time homebuyer age, so demand for housing was growing rapidly. At the same time, some people have noticed that house prices have gone up with inflation, but because their savings accounts haven’t been paying off, it’s becoming more popular to buy houses in line with inflation.

Our recent rate hike is a bit similar to the Great Inflation. Millennials are now on the rise, hitting the first home buyer age. Rising mortgage interest rates ended our recent boom, as did the Great Inflation.

One huge difference, however, is the sizes of the two booms. Real estate prices rose 18% during the Great Inflation, 79% during the boom that ended.

1985-1993, the savings and loan housing bubbleReal, inflation-adjusted home prices nationwide rose 21 percent in the first four years, then fell 13 percent in the next four. Existing single-family homes fell 12 percent from 1988 to 1991. Sales of new homes fell 32 percent from 1986 to 1991. In the lower end, real prices returned to 1986 levels in 1993.

This growth began in 1985 after mortgage interest rates dropped from 18% in 1981 to 13%. In 1986 rates were 10%.

Another big reason for this real estate boom is the deregulation of savings and loan associations. Some fraudsters buy S&Ls and use the money to finance their other businesses, often speculative real estate businesses.

The boom was concentrated in the Northeast and California, but many parts of the country experienced little or no growth. Metro New York City was hit hard. In the year From the high of 1987 to the low of 1997, real estate prices in New York City fell by 31%. Nationally, real estate prices are down 13 percent.

1997-2012, the Great Recession housing bubbleReal, inflation-adjusted home prices nationwide rose 76 percent in the first nine years, then fell 37 percent over the next five years. Sales of existing single-family homes fell 42 percent from 2005 to 2008. Sales of new homes fell 76 percent from 2005 to 2011. At the bottom of 2012, real prices were back 12 years earlier than in late 1999.

The common view today is that this was a credit bubble. Today, the market doesn’t face the same downside risks because we don’t see the same crazy mortgages. On the other hand, we have many investor-owned single-family homes today, which can create an unexpected reaction to a down market. It is much easier for investors to sell in a falling market than for families to find a new place to live if they sell.

But one reason hasn’t changed since the Great Recession: the current system closes quickly. In previous cycles, S&Ls dominated the mortgage market. Often times, origination, service and mortgages cover their homes. They can be slow to close and sometimes rent out homes that are foreclosed on during a bust when another distressed sale depresses the value of their other properties.

Today, even though this can cause home prices to drop faster, moving ASAP still benefits mortgage servicing companies. Bans are low now, but if bans increase too much this system could become a problem again.

2012-2020?, The Epidemic Boom and Bust? Real, inflation-adjusted home prices nationwide have risen 79 percent in 10 years. The decline is just beginning.

Skyrocketing mortgage interest rates are now at a standstill amid the epidemic of rising housing prices. We may not see real prices fall as much as the 37% drop in the last cycle.

But we probably won’t see real prices drop as much as in the previous two busts (down 10% 1979-1982, and 13% 1989-1993). This is because inflation has increased by 79 percent compared to a 76 percent increase between 1997 and 2006.

If we get a 10% correction nationally, be aware that some hot markets will see much bigger falls. In the S&L bust, for example, real country home prices fell 13%, while real Los Angeles prices fell 41%. But without correction, we face another danger. The United States may become like Canada, Australia, and New Zealand after the Great Recession. Their home values ​​haven’t gone down much since then and their home is incredibly expensive. No, it won’t be like last time. But it can be worse than the two previous buses.

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