_John Philip Mason is a residential appraiser with 20 years experience and covers the Hudson Valley region of New York. He’s a good friend and a true professional who wants to understand the correlation between rate of ascent and rate of fall. This week, he gives new meaning to the phrase “rocket scientist” in Solid Masonry._ …Jonathan Miller

The Harvard University’s Joint Center for Housing Studies recently released its annual [State of the Nation’s Housing Report [pdf]](http://www.jchs.harvard.edu/publications/markets/son2006/son2006.pdf). For those not wanting to read all 44 pages you can check out their summary [Fact Sheet [pdf]](http://www.jchs.harvard.edu/media/son2006_fact_sheet.pdf). That being said, I must confess the full report was compelling reading and I found myself delving into one section after another, as though it were revealing itself with all the intrigue of a good mystery novel. Okay, now I’ve completely embarrassed the geeky side of myself.

While the study had a mixed take on the national real estate picture, there were some items from the Fact Sheet that gave me reason to take a less balanced view:

* Among the 149 of the nation’s largest metropolitan areas, the number in which median house prices are at least 4 times median household incomes increased from 13 in 2001 to 49 in 2005 and at least 6 times from 4 to 14.
* After adjusting for inflation, house prices increased a record 9.4 percent nationally in 2005.
* Investor appetite for multifamily properties was undimmed last year, with institutional investors bidding up prices by 13.5 percent the first double-digit gain since 1984.
* Between 2001 and 2004, the number of households spending more than half their incomes on housing increased by nearly 2 million up 14 percent to 15.8 million.

I also found some additional facts and conclusions from the full report, which gave me an unsettling feeling:

* Until 2000, nationally weighted average home prices rose closely in line with median household incomes and general price inflation. _I’d like to add here that from 1996 to 2000 the national median price of a home rose 12.3%, but from 2001 to 2005 it jumped 29.7%, with 17.5 of that increase in the last two years._
* In the nation’s hottest housing markets, the erosion of housing affordability has been much more dramatic. In Phoenix, for example, the monthly payments on a median-priced home jumped from $930 in 2003 to $1,017 in 2004 and to $1,316 in 2005 even for homebuyers who were able to cover the increasingly large ten percent down payment.

So is the real estate market like a model rocket thrust into space? That is, if you point it so it climbs higher and faster, is the projection of the ascent any indication of the rate of the fall?