from your consumption of “housing services”—that is, having a place to live. (Of course, if you buy a home and

rent it out, you receive rental payments for the housing services you provide, which would offer a financial

return.) Buying a house to live in also offers the possibility of a capital gain from selling the house in the future

for more than you paid for it. There can, however, be different outcomes, as the Clear It Up on the housing

market shows.

Housing prices have usually risen steadily over time. For example, the median sales price for an existing one-
family home was $122,900 in 1990, but 232,000 at the end of December 2016, according to FRED® Economic
Data. Over these 24 years, home prices increased an average of 3.1% per year, which is an average financial

return over this time. Figure 17.7 shows U.S. Census data for the average sales price of a new home in the

United States from 1965 to 2021.

LINK IT UP
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