Six charts that put today's market in historical perspective — from opportunity cost and monthly affordability to rate dynamics, price-to-rent, the down payment barrier, and the lock-in effect keeping supply off the market. Data sourced from FRED and updated annually.
Median home price appreciation indexed to $100 in 2000, compared to S&P 500 total return and a small-cap value index. This is the price-appreciation-only comparison — it excludes leverage, shelter value, dividends (equity only), taxes, and transaction costs on either side.
Sources: FRED MSPUS (home price appreciation). Equity figures are approximate annual total returns (dividends reinvested). Small-cap value based on Fama-French US Small Cap Value factor data. 2025 figures are full-year estimates. No leverage, transaction costs, or tax effects modeled.
The framing matters: This compares home price appreciation against equity total return. A primary residence also provides imputed shelter value and most buyers use leverage (a mortgage), which amplifies both gains and losses. The equity lines reflect no leverage. This is not a direct investment comparison — it's a starting point for understanding opportunity cost. The Rent vs. Buy calculator models the full picture including down payment opportunity cost and equity buildup.
Estimated monthly principal & interest payment on the median U.S. home with 20% down (blue), versus what that same 2000 payment would cost today if it had simply tracked CPI inflation (dashed). When the blue line falls below the dashed line, housing is cheaper in real terms than 2000; when above, buyers are paying an inflation-adjusted premium.
Sources: FRED MSPUS (median home sales price), Freddie Mac PMMS (30-year fixed rate), BLS CPIAUCSL (CPI All Urban Consumers). Assumes 20% down, 360-month amortization, P&I only. Inflation baseline anchored to the computed 2000 monthly payment. 2025 figures are estimates.
The hidden story: From roughly 2009–2020, the actual monthly payment dropped below the CPI baseline — meaning housing was genuinely more affordable in real terms than it was in 2000, driven almost entirely by falling rates. That window closed abruptly in 2022. By 2023–2025, buyers are paying a meaningful real premium above what CPI-level inflation alone would predict, even though prices themselves have been relatively flat since the 2022 peak.
30-year fixed mortgage rate vs. 10-year Treasury yield, and the spread between them. The spread is the mortgage market's embedded risk premium — and it widened sharply after 2022.
Sources: Freddie Mac PMMS (30-year fixed), Federal Reserve H.15 (10-year Treasury constant maturity). Annual averages. 2025 figures are full-year estimates.
The spread story: Historically, 30-year mortgages price at roughly 1.7 percentage points above the 10-year Treasury. That spread widened to nearly 3 points in 2023 — meaning buyers paid a hidden premium on top of already-elevated Treasury yields. As the spread normalizes, mortgage rates can fall without any Fed action.
Home prices relative to annual rents, expressed as a multiple (i.e., how many years of rent it would take to buy the median home). A higher ratio generally favors renting and investing the difference; a lower ratio favors buying.
Sources: FRED MSPUS (median home price), BLS CPI Rent of Primary Residence index (CUUR0000SEHA), anchored to estimated 2000 median rent of $602/month. Annual averages. 2025 figures are estimates.
What changed in 2022: The price-to-rent ratio hit ~30x in 2022 — surpassing the 2006 pre-crisis peak of ~28x. Since then, rent growth has caught up significantly and the ratio has moderated toward historical norms. This means renting vs. buying is now a closer financial call than it appeared at the 2022 peak, though the monthly payment remains historically elevated due to rates.
A 20% down payment on the median U.S. home expressed as a percentage of median household income — how much of one year's gross income a typical household would need to save.
Sources: FRED MSPUS (median home price), FRED MEHOINUSA672N (real median household income). Down payment = 20% of median price. 2025 figures are estimates.
What this means: In 2000, saving a 20% down payment required about 80% of one year's median household income. By 2022, that number reached about 116% — meaning a typical household would need to save more than a full year of gross income just to clear the entry barrier. Incomes have grown; they haven't kept pace with home prices.
Distribution of outstanding U.S. mortgage balances by interest rate bracket, as of early 2024. Most existing homeowners locked in rates far below today's market — and have little financial incentive to sell.
Source: FHFA/Federal Reserve, estimates based on outstanding mortgage originations by vintage. Approximate distribution as of Q1 2024. Current 30-year fixed rate: ~6.6%.
Why supply is frozen: Roughly 63% of outstanding mortgages carry rates below 4%. A homeowner with a 3% mortgage who sells and buys again faces a payment roughly 60–80% higher on the same loan size — purely from the rate difference. This "lock-in effect" is a primary driver of the inventory shortage keeping prices elevated even as affordability deteriorated.
All data is sourced from publicly available federal datasets (FRED, FHFA, Freddie Mac PMMS) and updated annually. Home prices use the FRED MSPUS series (median sales price of houses sold). Mortgage rates are annual averages from Freddie Mac's Primary Mortgage Market Survey. Treasury yields are Federal Reserve H.15 constant-maturity rates. Household income uses FRED MEHOINUSA672N. Rent index uses BLS CPI Rent of Primary Residence (CUUR0000SEHA). 2025 figures reflect full-year estimates based on available data through early 2026.
Equity return data in Chart 01 uses approximate annual total returns (price + dividends reinvested). Small-cap value returns are based on Fama-French US Small Cap Value factor data (publicly available via the Ken French Data Library). These are approximations intended for educational context, not investment advice. The opportunity cost chart excludes leverage, transaction costs, taxes, and the shelter value of homeownership — all of which materially affect the actual comparison. Use the Rent vs. Buy calculator for a model that accounts for these variables.