Tracking 116 Years of U.S. Housing: New Database Unlocks Secrets of Real Estate's Past and Future

Photo byJody Murray, UC Merced

In a breakthrough for understanding the U.S. housing market, a team of economists has unveiled the Historical Housing Prices Project (HHP), an interactive database tracing over a century of home sales and rental prices. This publicly accessible resource spans 116 years, offering insights for homebuyers, policymakers, and real estate professionals looking to navigate the ever-shifting landscape of housing markets.

At the heart of the project is UC Merced’s Professor Rowena Gray, who collaborated with economists from Trinity College Dublin, the Federal Reserve Bank of Philadelphia, and the University of Pittsburgh. Together, they’ve created a data-driven tool that reveals long-term trends in housing prices across 30 major U.S. cities, from the turn of the 20th century to the digital age.

A Historical Look at Housing: From Pneumatic Tires to Craigslist

The HHP pulls from over 2.7 million listings found in newspaper real estate sections, creating a consistent data source that stretches from 1890 to 2006. The results are displayed through intuitive visualizations, allowing users to compare housing prices across cities and time periods, such as San Francisco in the 1930s or Portland in the 1980s. This is the first time a systematically collected dataset of this magnitude has been available to the public.

According to Gray, this project marks a significant step forward in understanding the evolution of housing markets. “Before now, we didn’t have a systematically collected annual dataset on rents and sales prices for this number of cities over such a long stretch of time,” she said.

Unexpected Insights and Economic Revelations

One of the project’s key revelations: inflation-adjusted home prices more than tripled between World War I and the Great Recession, challenging previous estimates that suggested only a doubling of prices during that period. Similarly, rental prices, after being adjusted for inflation, rose 20% between 1914 and 2006, while earlier studies claimed rent prices had been largely static after a post-World War II decline.

The project also sheds light on broader economic patterns, revealing that overall inflation may have been stronger than previously thought. Prices rose at 3.5% per year over the past century, compared to the previously estimated 3.3%, with long-term implications for financial planning and policy.

The database also captures the volatility of housing returns. In coastal cities, home investments have historically yielded high returns, while cities like Detroit have suffered from negative returns for decades. This contrast highlights the uneven economic landscapes across U.S. regions and underscores the importance of local knowledge in real estate decision-making.

A Tool for the Future of Housing Policy and Investment

The implications of the HHP are far-reaching. Potential homebuyers can leverage its insights to make informed decisions about when and where to purchase. For real estate professionals, it provides a data-rich foundation to craft market strategies and assess investment potential. Policymakers can analyze long-term trends in housing affordability, helping guide future legislation aimed at addressing today’s housing crises.

The project, hosted by the Federal Reserve Bank of Philadelphia, has been a monumental collaborative effort, involving about 50 contributors who sifted through countless archival listings. “We’re excited to put this out,” Gray said, reflecting on the significance of the HHP’s contribution to both academic research and practical real estate applications.

Looking Ahead: What the HHP Could Mean for Housing Markets

The Historical Housing Prices Project stands as a testament to the value of long-term data collection. As housing markets continue to evolve, this tool offers an essential resource for understanding the complexities of the real estate world, illuminating not just the past but also providing critical insights for the future.