Below, you'll find three charts that reveal how the M2 money supply—essentially the pool of easily accessible cash, savings, and liquid assets—connects to home prices. The first chart compares St. Louis home prices to M2, the second shows the Case-Shiller 20-city composite index vs. M2, and the third tracks the Case-Shiller national home price index alongside M2. These charts highlight a key relationship: when the M2 money supply grows, it often makes borrowing cheaper, which can push home prices higher. But if M2 grows too fast, inflation can kick in, driving mortgage rates up and cooling the market. Whether you're buying or selling, understanding this connection can help you anticipate changes in home affordability and market trends.
Have questions? Want to know how this might affect the future value of your current home or the home you’re considering purchasing? Contact me—I’d be happy to provide insights and guidance tailored to your situation!