U.S. Housing Market in 1975

In 1975, the U.S. housing market recorded existing-home sales averaged 2.48 million, new-construction sales of 549K, a median existing-home price of $35,300, and a 30-year fixed mortgage rate of 9.05%. The National Bureau of Economic Research classified at least part of 1975 as a U.S. recession, and housing-market behavior has to be read against that backdrop.

Year over year, existing-home sales rose 9.3% from 1974, new-home sales rose 5.8%, the median existing-home price rose 10.3% to $35,300, the 30-year fixed mortgage fell 0.14 points to 9.05%. Compared with five years earlier (1970), existing-home sales were 54% above 1970, median prices were 53% higher in nominal terms. The NBER recession in this year shaped buyer financing behavior, builder inventory decisions, and the Federal Reserve's near-term policy response.

By the numbers — 1975: new-home sales 549K, existing-home sales 2.48M, median existing price $35,300, 30-year mortgage rate 9.05%.

Macroeconomic Context

1975 was a recovery year. Real GDP fell 0.2% for the full year but grew sharply through the second half as the recession bottomed in March. CPI inflation moderated slightly to 9.1%. Unemployment peaked at 9.0% in May and remained near 8.5% through year-end. The federal funds rate fell to 5.8% as the Fed eased aggressively under Chairman Arthur Burns. New York City reached the brink of bankruptcy in October, prompting the famous "Ford to City: Drop Dead" Daily News headline; federal loan guarantees ultimately saved the city. The Saigon evacuation in April marked the end of U.S. involvement in Vietnam.

The Mortgage & Credit Market

30-year fixed mortgage rates eased modestly to 9.05%. Mortgage origination volume recovered through the second half as S&L deposits flowed back when money-market rates fell. The Home Mortgage Disclosure Act, passed in December, required lenders to disclose mortgage origination data by census tract — providing the evidentiary foundation for redlining litigation and what would become the Community Reinvestment Act of 1977. The era of explicit federal mortgage-fairness regulation had begun.

Cycle Position

New-home sales recovered to 549,000, up 6% from 1974's 519K. Existing-home sales climbed to 2.48M, the highest since the NAR series began. The median new home cost $39,300; the median existing home cost $35,300 — the first time median existing prices had crossed $35K. The cycle was emerging from recession into what would become the second great post-war housing boom, peaking in 1977-78 before the Volcker squeeze.

The Year in Long View

Existing-home sales of 2.48M in 1975 represented 35% of the all-time annual peak (7.08M in 2005). New-home sales of 549K were 43% of the 2005 record (1,283K) and 179% of the absolute series low (306K in 2011). Combined U.S. home sales of 3.03M ran 36% of the 2005 all-time peak (8.36M total). Within the 1970s, the 1975 reading sat 10% below the decade average of 2.75M existing-home transactions per year. The median existing-home price of $35,300 translates to roughly $206,157 in 2024 dollars — about 51% of 2024's $408,000 record in real terms. Buyers in 1975 were not paying anything close to today's inflation-adjusted prices. Against the median U.S. household income of $10,512, the price-to-income ratio worked out to 3.4× — compared with 2024's all-time-high reading of 5.4×, which marks the most stretched affordability in the modern record. The 30-year fixed mortgage rate of 9.05% sat 1.35 points above the full-history (1971–2024) PMMS average of 7.7% and 2.21 points above the 2024 reading of 6.84%. At that rate, the principal-and-interest payment on a $200,000 30-year mortgage would have been roughly $1,616/month. Year-over-year, existing-home sales rose 9.3% from 1974, new-home sales rose 5.8%, the median existing-home price rose 10.3%. Looking forward to 1976: existing sales would rise 23.4% to 3.06M, the 30-year fixed would fall 0.18 points to 8.87%.

Sources & Methodology

The 1975 figures on this page come from three federal data sources: the U.S. Census Bureau Survey of Construction (annual new single-family home sales), the National Association of Realtors Existing Home Sales report (annual existing-home transactions and median sale prices), and the Freddie Mac Primary Mortgage Market Survey (annual average 30-year fixed mortgage rate). Recession bands are drawn from the National Bureau of Economic Research Business Cycle Dating Committee. Inflation adjustments use the Bureau of Labor Statistics' CPI-U series, and price-to-income ratios reference the Census Bureau's annual median U.S. household income table.