> The question is why it increases so much faster than inflation. Does it historically? Looking at "Case-Shiller Home Price Index vs. CPI (US)" (second graph

> The question is why it increases so much faster than inflation. Does it historically? Looking at "Case-Shiller Home Price Index vs. CPI (US)" (second graph on this page) https://www.longtermtrends.net/home-price-vs-inflation/ https://www.longtermtrends.net/home-price-vs-inflation/ housing prices tracked inflation very closely until the dot.com era. Then housing prices started to rise faster, until the 2008 crash. Then housing prices pretty much reverted back to the inflation curve. The last decade has been an unprecedented bull market with low inflation, so yes, over these ten years housing prices have run away from inflation. But now inflation is rising and housing is dropping. It's anyone's guess whether it'll drop back to the inflation curve but it well might. So it's clear that housing prices have much larger market swings than the steady march of inflation, but it's not clear that in the long run it actually outpaces it much. Would be most interesting to see this same graph on a per-city basis instead of nationwide average, but I didn't find that info. Certainly housing prices will outrun inflation in a few hotspot markets like SF or NY. But that also means that for most regular cities the housing prices don't increase at the rate shown in the graph.