U.S. Housing Market in 1985

The Volcker housing recession ended in 1985. Mortgage rates fell to 12.43% — still high by modern standards but the lowest reading since 1979 — and existing sales rebounded to 3.13M.

The median existing home cost $75,500 that year — just 2.4× the median U.S. household income, the most affordable ratio in the modern record. New-construction sales reached 688K. The recovery was uneven: judicial-foreclosure states like Texas and the oil patch were entering their own regional downturn that would take until 1991 to resolve, while coastal markets enjoyed the start of what would become the late-1980s boom.

See also