U.S. Housing Market in 1972

In 1972, the U.S. housing market recorded existing-home sales averaged 2.25 million, new-construction sales of 718K, and a 30-year fixed mortgage rate of 7.38%.

Existing-home sales rose 11.4% from 1971. the median existing-home price rose 7.7% to $26,700. the 30-year fixed mortgage fell 0.16 percentage points to 7.38%.

Macroeconomic Context

Nineteen seventy-two was the strongest year of the early-1970s housing boom and one of the most buoyant in postwar history. Real GDP grew roughly 5.3%, unemployment fell toward 5.5%, and measured inflation held to about 3.4% — temporarily subdued by Phase II of Nixon's wage and price controls. The combination of an election-year stimulus push, accommodative monetary policy from Arthur Burns's Fed, and the continued build-out of the secondary mortgage market through Freddie Mac and Fannie Mae created near-ideal conditions for residential construction.

New-home sales surged to 718,000 — a level not matched for three decades — and housing starts set an all-time record above 2.3 million units. The Nixon administration touted the housing boom as evidence that its economic management was working, and the President won reelection in a landslide in November. Mortgage rates held in the 7.3–7.5% range under Phase II controls and accommodative Fed policy, keeping monthly payments manageable despite rapidly rising median home prices.

Behind the headlines, however, inflationary pressure was building. Price controls were suppressing rather than solving cost-push inflation; raw material costs for construction — lumber, concrete, copper — were rising globally. When controls began to be lifted in early 1973, a burst of pent-up price increases was unavoidable. The year also saw the Watergate break-in in June, an event whose ultimate consequences for economic confidence would not become apparent until 1973–74. In retrospect, 1972 was the peak of the cycle.

See also

• The full 1963–2024 data table
• 30-year fixed mortgage rate history
• Median home price history