Home Prices Rise But Are Still Below 2006 Peak

October 23, 2013 | Nat Kellogg, CFA, President

Our Chart of the Week looks at the S&P Case-Schiller 10-City Composite Index which is one of the best broad measures of housing prices in the U.S. This is a “drawdown” chart that looks at prices as a percentage of their prior peaks. When the lines on the chart are at 100%, prices are at a new all-time high. The chart clearly shows the modest drop in housing prices that resulted from the early 1990’s recession and the severe drop in prices following the 2008 credit crisis. Over the last 24 months, home prices have started increasing again as the economy improved, employment picked up, and interest rates remained low. Nonetheless, broadly speaking, housing prices remain significantly below their prior peak in 2006. A few interesting things to note:

  •  The 10-City Composite Index fell 34% from a peak in April 2006 to a trough in January 2012. The index has subsequently increased 16% from those lows.
  • Las Vegas had the largest drop falling 62% from peak to trough. However, housing prices in Las Vegas have jumped 34% from the bottom. Las Vegas still remains the most depressed housing market where, even after the recent advance, prices are only about half of what they were at the peak.
  • Denver is the only major market that has returned to peak pricing levels. Boston has been the second most resilient market, where prices are only 10% below the prior peak.

The rebound in housing prices is providing a nice boost to U.S. GDP, employment, and the stock market. As housing prices rise, fewer homeowners are underwater on their mortgages (i.e., owing more on their mortgage than their home is worth) which improves consumer credit quality, leads to lower mortgage delinquencies, and gives homeowners more flexibility to refinance or sell their homes. All of these trends still appear to be in the early stages at this point. As long as interest rates stay low, we expect these trends to continue in the months ahead, providing a boost to the economy and the markets.

Nat Kellogg, CFA

Get to Know Nat

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

Related Content


The “Fix” Is In!

The strength of the U.S. economy over the last several quarters has surprised many investors, as consensus expectations from the…


The Emergence of Argentinian Equities

Argentina has faced myriad economic headwinds in recent time, including hyperinflation, currency-related difficulties, and a series of defaults on its…


Is Bitcoin Fairly Valued?

Despite mixed performance to start 2024, bitcoin finished the first quarter up roughly 68%. Buoyed by a broad weakening of…


1Q 2024 Market Insights Video

This video is a recording of a live webinar held April 25 by Marquette’s research team analyzing the…


Mind the Gap

Any ride on the London Tube reminds riders to mind the gap: Beware the space between train car and platform…


Japan: This Year’s Vacation Recommendation

Foreign investment isn’t the only thing streaming into Japan. In 2023, the number of travelers to the country surpassed long-term…

More articles

Subscribe to Research Email Alerts

Research Email Alert Subscription

Research alerts keep you updated on our latest research publications. Simply enter your contact information, choose the research alerts you would like to receive and click Subscribe. Alerts will be sent as research is published.

We respect your privacy. We will never share or sell your information.

Thank You

We appreciate your interest in Marquette Associates.

If you have questions or need further information, please contact us directly and we will respond to your inquiry within 24 hours.

Contact Us >