I was reviewing the national data on the Case-Shiller U.S. National Home Price Index and it appears nationally the market peaked in July 2024 and has slowly tilted the opposite direction.

That index is a little different than many that just measure average or median home sales. They actually measure the price change in repeat sales for the same property over time to establish the index. The theory is by doing it this way they eliminate the "quality" issues of other indexes. A quality issue would be for example the size of the average house increasing over a few decades. That would drive up the median home sale price when in fact the real value of a specific property may or may not have increased.

It doesn't however measure at different price points to know how it is affecting the smaller/cheaper houses compared to the mansions. Having lived through these cycles before, you can bet that it's likely the bigger houses are pulling the index down when the smaller/cheaper homes are still holding their value or even increasing. That's what usually happens when times get tight for the American public, they live smaller.

MikeA, said “ you can bet that it's likely the bigger houses are pulling the index down when the smaller/cheaper homes are still holding their value or even increasing.”

My Realtor buddy sends me daily emails of 10-15 properties (in one email) showing properties I might be interested in. The list agrees with the index you mention: prices are generally falling slightly. $2000 price reduction on a $250,000 house. Stuff like that. Different lists of houses daily. Almost none of them are going up... 9 out of 10 trending downward, but only slightly.

Everyone yearns for the days of low interest rates to return. While my crystal ball is foggy (still need to get that fixed!), I doubt that would be a good thing as buyers would race back into the market to try to lock something down, but we still haven't achieved the fundamental solution of building more starter homes. So prices would just shoot up again, buoyed by greater demand, and the bidding wars would start again.

The business model needed today would be building relatively inexpensive 3/2/2 "starter" homes en mass. Build in a 200 - 300 unit subdivision around medium-size cities. Maybe within 30 minutes so the commute isn't crazy. Sell them for $300,000 - $350,000 each. It would take considerable economics of scale and cookie cutter floor plans that could be knocked together in 3-4 months, but my guess is they'd presell the entire portfolio before breaking ground. The city in question would have to be 100% on board with the plan, clearing the path of zoning obstacles and shutting down NIMBYs.

So, not exactly row housing... but just barely a step up. Small yards. 1200-1300 sq ft. floorplan, Builders grade indoor fixtures. 3 colors of siding to choose from. Create a house that someone can buy cheap and upgrade / personalize over time as income rises.

That's exactly the conditions in which we found our first home in our current town back in 2001. Bought it for $99,500. Today, it's estimate value is between $250K - $275K.

I agree with Sid - Determining the solution for affordable housing is the easy part having local political leaders to drive the solution to fruition is the problem.

As I noted in other post the FHA-235 program in the 60/70s was a successful program, especially in rural SC. The houses were built to good solid common since standards and that was a time in the rural areas when permits were not required.

It is sad that solutions to many problems is available but the political will isn't.