Parts III–V took us city by city from the 1890s to the end of World War II. This post covers what came next: the long postwar expansion, roughly 1948 to 1970. In the national averages it looks like an age of calm — steady growth, low drama. But that calm is an illusion of aggregation. Underneath it, American cities were splitting, seemingly permanently, into expensive and cheap, and the housing map we are familiar with today was being drawn. And “calm” is the wrong word, really — it was the leading edge of the longest boom in the whole record.
A reminder on the data, as in earlier instalments: the figures come from the Historical Housing Prices project — 2.7 million newspaper listings across 30 cities (Lyons, Shertzer, Gray & Agorastos, QJE 2025; NBER w32593, VoxEU). This is also the period where the new data earn their keep most clearly. City-level sale prices don’t exist in the standard sources before 1975 (when the FHFA indices begin), and city-level market rents don’t exist anywhere before the 1990s. So almost everything below is something you simply cannot see in the data economists have used until now.
51. Real house prices did rise after the war — the old index missed it
The long-relied-upon Shiller index shows real house prices going more or less sideways from 1950 to 1995. The HHP data disagree: national real prices rose about 21% between 1948 and 1970, and kept climbing thereafter. American housing started getting more expensive, in real terms, decades earlier than the standard story allows.
52. The national calm hid a widening gap between cities
That modest national rise was an average of wildly different fates. Between 1948 and 1970, real sale prices ranged from +50% in Boston and +43% in Los Angeles down to −11% in St Louis and −12% in Memphis. Same country, same era, opposite directions.
53. California pulled away first — and early
We tend to date California’s housing exceptionalism to the 1980s. The data put it a generation earlier. Los Angeles real prices were already 50% above their 1948 level by 1960; San Diego and San Francisco were 30%+ above by 1970. The coastal premium was visible by 1960 — fifteen years before the city indices everyone uses even begin.
54. The Rust Belt’s housing weakness began in the 1950s
The mirror image of California is the industrial heartland. St Louis real prices fell about 11% between 1948 and 1970 and stayed below their 1948 level right through 1975; Cleveland, Cincinnati, Pittsburgh and Detroit were flat or falling. The Rust Belt’s housing story is usually told as a post-1970s, post-deindustrialization collapse. In fact its homes were losing real value through the supposed golden age.
55. This split tracked building, not just demand
Why did some cities soar and others stall? Largely supply. Cities that entered the postwar period with ample housing (Philadelphia, St Louis) or that kept building freely (Atlanta) stayed cheap. Cities that slowed construction — Los Angeles and San Francisco above all — saw prices rise. The zoning-and-supply debates that erupted in the 1970s were describing a divergence that had already begun.
56. The postwar rent spike hit some cities three times harder than others
Here is something only market-rent data can show. As wartime rent controls lapsed in the mid-to-late 1940s, real market rents surged across the country — but by wildly different amounts. Miami’s real rents peaked 227% above their 1941 level in 1947; Los Angeles peaked +140% in 1946; Tampa +115%; Phoenix +114%. At the other extreme, some cities barely felt it at all: Baltimore’s real rents rose just 1%, and Charleston’s kept falling right through the war, 27% below their 1941 level by 1944. Nationally, the spike peaked at +35% above 1941, in 1948 — but that single number hides a country experiencing completely different housing markets at the same time.
57. The spike was temporary almost everywhere — except where cities couldn’t build
Nationally, the postwar rent surge fully unwound: by 1960, real rents were only 4% above their 1941 level — the whole spike had given itself back. Most cities followed the same path within a decade of their peak: Phoenix was back to normal by 1951 (7 years), St Louis by 1957 (9 years) — the same cities, from fact 55, that kept building through the period. But the cities that couldn’t build never gave the spike back. Los Angeles’s real rents were still roughly 60% above their 1941 level in 1971, and Tampa’s premium had actually grown — to 126% above 1941, bigger than its original 1947 peak. The same supply constraint that was pulling sale prices apart (fact 55) was doing the same thing to rents: a temporary wartime shock in cities that could build, a permanent one in cities that couldn’t.
58. Prices and rents permanently parted ways
Once the postwar rent spike fades from the picture (facts 56–57), a cleaner pattern emerges: nationally, real sale prices kept climbing through the postwar decades and beyond (fact 61), while real rents settled and stayed roughly flat from the early 1950s on. That is the start of the permanent divergence between sale prices and rents that defines modern housing markets. Only a dataset with both segments, city by city, and long enough to look past a wartime rent shock, can show cleanly when and where this began.
59. Yields collapsed as the modern mortgage arrived
If prices rise while rents don’t, the rental yield falls — and it did, fast. The national gross rent-to-price ratio fell from about 10.6% in 1948 to 7.4% by 1960, the sharpest compression in the whole record. The cause was financial: the long, fully-amortizing, high-loan-to-value mortgage spread between the 1930s and 1960s, steadily cutting the cost of owning relative to renting and letting buyers bid prices up against the same rents.
60. Yield compression had two opposite faces
The same falling yield meant different things in different places. In California, yields fell because prices raced ahead of rents. In the industrial South and Midwest, yields fell because rents collapsed faster than prices — the rent-to-price ratio dropped ~45% in Louisville and ~41% in New Orleans and St Louis, driven by falling rents, not rising prices. One statistic, two completely different stories.
61. The calm of 1948–1970 was the leading edge of the longest boom in the whole record
Zoom out from any single window and something remarkable appears. From its 1949 trough, the national real sale-price index rose 77% over the next thirty years to a peak in 1979 — without a single interruption worse than about 6%. (The two dents: −6.4% in 1949 itself and −5.3% in 1958; every other year in the run was a new real high.) That makes it roughly two and a half times longer than the next-longest expansion in the entire 1890–2006 record — the 1994–2006 bubble, twelve years, +76% — and about four times the length of a typical prewar cycle (5 to 8 years, peak to peak: +23% in 1900–08, +62% in 1919–27, +46% in the immediate 1942–47 postwar surge itself). What looked, from inside 1948–1970, like modest, steady growth was in fact the first two-thirds of the longest unbroken run American housing has ever had.
One more thing happened alongside all this — worth knowing, even though it isn’t something HHP alone can claim. The national homeownership rate rose a record ~13.7 points in the 1950s alone, reaching nearly 62% by 1960, up from a Depression-era 38%. That number comes from the US Census, not from HHP; it’s useful context for everything above — the mortgage revolution behind fact 59, the price boom behind fact 61 — but it isn’t itself a discovery this dataset can take credit for.
Next time (Part VII): the Great Inflation of 1968–1983 — including 1979–82, the moment the thirty-year calm identified in fact 61 finally breaks — and how badly the official statistics mismeasured what was happening to both rents and prices along the way.