Comparing 5-year car and home price trends

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Comparing 5-year car and home price trends

There is a sign in front of a house.

It can feel like a pipe dream to purchase a vehicle that doesn’t break the bank. Until automakers overcome supply chain and labor challenges to get more cars off the assembly line, prices will continue to rise. Competition in both the new and used car markets has increased due to the fact that car buyers have turned to pre-owned vehicles.

The housing market has seen a big increase. The median home sale price was $440,300 in the second quarter of 2022. Historically low interest rates and an increased demand for housing caused a shortage of homes for sale and record high prices across the country. The number of home sales has fallen since their peak, despite the high prices.

To understand how car and home prices have changed over the past five years, Jerry compiled data from the Bureau of Labor Statistics. Almost all of the population is included in the Consumer Price Indexes for new and used vehicles. The inflation rate is measured by the changes in the index.

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Home prices have skyrocketed in the last five years

Home prices have gone up in the last five years. The market is fraught with low inventory and decreased housing affordability two years into the epidemic. Home prices have increased in the last year.

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New car prices have also risen, but not as dramatically

The price of a new car has gone up, but not as much as the housing market.

The price of a new car has increased over the past five years. There was a new wave of economic uncertainty caused by the Pandemic in 2020. The combination of inflation and chip shortages has created a perfect storm for new car prices to go up a lot.

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Used car prices have seen a more rapid rise

In the last five years, the price of a used car has increased at the same rate as the price of a home.

The used car market has been negatively impacted by the Pandemic. According to CNN, used car prices have risen over 30% in the last year. The drop in tourism in 2020 caused rental car companies to sell one-third of their fleets. With tourism making a comeback, rental car companies are short of cars and don’t want to sell them to wholesale dealers. This has caused used car prices to be lower at first, but then shoot up quickly to match new car prices.

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How COVID-19 has impacted demand for cars and homes

An aerial view of a half empty storage lot with brand new cars in it.

Many supply and demand issues are caused by Covid-19. The production of automobiles slowed due to theemic shutdowns. There was a shortage of used car supplies. Increased demand for used vehicles resulted in increased prices.

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Supply chain issues send prices even higher

There are new homes in the area.

New home construction is on the rise despite the current home shortage. Supply chain issues are slowing things down New homes are taking longer to be built because of a shortage of materials. Home prices will likely be stable when the housing market becomes more plentiful.

Justin Sullivan // Getty Images

Inflation makes cars and homes more expensive

There is a flyer in front of a house.

The prices of houses and cars have gone up. This happens when the price of services and goods goes up.

The annual inflation rate rose to 6.2% in October 2021, the highest level in more than two decades. Americans saw a 8.5% increase in the consumer price index from July to July. The average monthly payment for a new mortgage went up 50% compared to before the outbreak.

The story was produced and distributed by Stacker studio.