New Home SalesCENSUS
412K
U.S. Housing Market · 1982 · NBER recession
U.S. Housing Market in 1982
recession
Existing SalesNAR
1.99M
Median PriceNAR
$67,800
30Y MortgagePMMS
16.04%
In 1982, the U.S. housing market recorded existing-home sales averaged 1.99 million, new-construction sales of 412K, and a 30-year fixed mortgage rate of 16.04%.
Existing-home sales fell 17.8% from 1981. the median existing-home price rose 2.1% to $67,800. the 30-year fixed mortgage fell 0.59 percentage points to 16.04%. The NBER classified at least part of the year as a U.S. recession.
By the numbers — 1982: new-home sales 412K, existing-home sales 1.99M, median existing price $67,800, 30-year mortgage rate 16.04%.
Macroeconomic Context
The recession of 1981–82 reached its deepest point in late 1982, with GDP contracting approximately 1.8% for the full year — the worst annual performance since the 1930s. Unemployment peaked at 10.8% in November and December, the highest since the Great Depression, as manufacturing, construction, and retail shed millions of jobs. The Midwest "Rust Belt" was particularly devastated, with steel and auto towns experiencing depression-level unemployment. Yet inflation, responding finally to Volcker's sustained tight-money policy, fell sharply: CPI inflation dropped from 10.3% in 1981 to about 6.2% in 1982.
The critical policy shift came in the fall of 1982. The Garn-St. Germain Depository Institutions Act passed in October, further deregulating savings institutions and allowing thrifts to offer adjustable-rate mortgages and new deposit instruments. More importantly, the Fed — seeing inflation falling toward target — began easing monetary policy. The federal funds rate was cut from above 15% to around 9% by year-end. Mortgage rates fell from their 16.63% 1981 annual average to approximately 16.04% for 1982, but the pace of decline accelerated sharply toward the end of the year.
New-home sales hit approximately 412,000 — the lowest in the postwar record. Housing starts were similarly depressed. But the seeds of the Reagan recovery were being planted: falling inflation, easing rates, and the supply-side fiscal stimulus of the 1981 tax cuts were beginning to work through the system. The housing market was one of the first sectors to respond when rates broke lower in late 1982, as pent-up demand from two-plus years of near-paralysis began to be released.