Here are graphs from the Economist. The first is for Home Prices in real terms. The second is for Home Prices / Rents. In both cases, the figures are just indexed, and if you look closely, you can see that they understate the price movement of the other countries, relative to the US, in the Price/Rent graph, because they are at lower levels in the earlier years. This is especially interesting in the case of Canada and Australia. These are countries known for having nothing but space. Yet, they have managed to create a supply problem in their housing markets. The value of dense cities and the seemingly universal refusal to build in them in the Anglosphere countries has led to land, land everywhere, and not a spot to live on.
Here is a graph comparing household debt, as a percentage of GDP, for Canada, Australia, and the US. I have used Federal Reserve measures for the US to get a longer time series, but the measure is the same as the one for the other two countries.
But, in any case, US mortgage leverage is about back to the comfortable range it was in before the bust. We probably need about 30% growth in home values and in mortgage levels to get back to equilibrium values in housing. It could be that more than 10% is from a real decline in available housing stock because of our decade long homebuilding depression. But, as we see with the metropolitan area data, since housing demand becomes inelastic in the face of supply constraints, if anything, the housing shortage has inflated the equilibrium value of the existing housing stock. I think it is possible that we need to see prices move up by that much in order to trigger enough new homebuilding to reverse course and create a housing stock that is affordable again.
That probably also means well over 1.5 million units per year for a while. I doubt we will allow either those prices or those quantities to develop. But, I think, ironically, that is the only way, in the long run, along with urban development reform, to reduce the absolute level of household debt. The irony is that if San Francisco and Manhattan were filled with high rise condo buildings and Phoenix and Dallas had thousands of new 3,000 square foot homes for median income households, debt levels would be much lower. The only sustainable macroprudential policy is abundance. There is no political faction currently in favor of true macroprudence. But, boy are we all excited about "getting tough" on people. Wall Street would just love to make us more like Canada. They see billions in profits from moving that green line up. Just let 'em try. We're gonna "get tough" on 'em if they do. We're no chumps.