If you look at the Case Shiller chart for the same period as the chart above, it doesn’t look as dramatic. What is interesting is that prices have been increasing exponentially even since the 2006 peak build up.

1980-1996 = 7% pa
1996-2006 = 12% pa
2012-2015 = 24% pa

Total increase = 593%

Mortgage interest has gone in the opposite direction.

1980-2015 = -78%

In 1980, you paid around $3,000 pm for a $250k home
In 2015, you pay $7,000 for the same home now valued at $1.48m

Home prices have nearly sextupled
Interest payment declines nearly quadrupled
Mortgage payments only little more than doubled

The question is whether the inevitable crashes that follow boom cycles will eventually burst from this exponential build up exponentially.

Source: back of cigarette packet calculations publications 2015 all rights reserved