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How Far Did Home Prices Fall in 2008, and When Did They Recover? By Area, From the Index
How to find an area's biggest home price fall on the FHFA index, the quarter it got back, and the years a purchase at the top sat under water, on Phoenix.
The short answer
Nationally, home prices on FHFA’s quarterly index peaked in 2007 Q1, fell 19.0% to a low in 2012 Q2, and were back above the peak by 2016 Q4, 9.75 years later. That average hides a wide range. The Phoenix metro fell 51.1% from 2006 Q4 to 2011 Q2 and took 12.5 years to get back; Nevada fell 55.7% and took 13.75 years; Texas did not have its biggest fall in 2008 at all. The crash and recovery tool finds these three dates for any state or metro.
How a fall is measured
The series is FHFA’s all-transactions House Price Index, quarterly, not seasonally adjusted, for every state and 410 metro areas from 1975, in the quarterly master file. Walking it from the start, each quarter is compared with the highest value before it. The largest of those declines is the fall; its peak is that earlier high, its low is the quarter of the largest decline, and the recovery is the first later quarter at or above the peak value. Because the scan covers the whole series, it reports whichever cycle was worst for that area, not 2008 by assumption.
Fall = (index at the low ÷ index at the peak) − 1
Recovery = the first quarter after the low at or above the peak value
A worked example: Phoenix
- The Phoenix-Mesa-Chandler, AZ index reached 292.48 in 2006 Q4, the highest value to that point.
- It fell for 4.5 years to 142.88 in 2011 Q2.
- 142.88 ÷ 292.48 − 1 = -51.1%.
- The first quarter back at or above 292.48 was 2019 Q2, at 293.82: 12.5 years from the peak.
- The all-time high is 518.97 in 2026 Q1; the latest quarter, 2026 Q2, is 517.12, -0.4% against it.
The same scan on four other series
| Area | Peak | Low | Fall | Back above peak | Years peak to recovery |
|---|---|---|---|---|---|
| Phoenix-Mesa-Chandler, AZ | 2006 Q4 (292.48) | 2011 Q2 (142.88) | -51.1% | 2019 Q2 | 12.5 |
| Arizona | 2006 Q4 (423.79) | 2011 Q2 (228.76) | -46.0% | 2019 Q3 | 12.75 |
| Nevada | 2006 Q3 (416.85) | 2012 Q2 (184.67) | -55.7% | 2020 Q2 | 13.75 |
| Texas | 1986 Q2 (131.67) | 1988 Q4 (113.21) | -14.0% | 1995 Q2 | 9 |
| United States | 2007 Q1 (380.31) | 2012 Q2 (308.14) | -19.0% | 2016 Q4 | 9.75 |
Arizona as a whole fell 46.0%, less than its largest metro, because the state series averages Phoenix with the rest of the state. Nevada’s 55.7% is the deepest of the five and its 13.75-year recovery the longest. Texas’s biggest fall is the 1980s oil bust, 14.0% from 1986 Q2 to 1988 Q4, with 9 years back to the peak; its 2008 decline was smaller than that, so the scan does not report it. Each series is scaled to its own base, so only the falls and the dates compare across rows, never the index levels.
Buying at the top: years under water
The personal version starts from a purchase quarter instead of a peak. It takes the lowest index value after that quarter relative to the value then, and the first quarter back at or above it. A home bought in Phoenix in June 2006 (2006 Q2, index 287.69) sank as far as 50.3% below its price on the area average, at 142.88 in 2011 Q2, and was back to its purchase value in 2019 Q1 (288.22): 12.75 years under water, and +79.7% since the purchase as of 2026 Q2. The same June 2006 purchase in Texas was never under water: the state index has had no quarter below its 2006 Q2 value of 208.51, and it is +154.8% since. Under water here means the area average sat below what was paid; the mortgage balance, which decides whether a sale would have cleared the loan, is the equity tool’s question.
Why your street may differ
The index is built from repeat sales and appraisals of the same homes on conforming mortgages, across the whole metro or state (FHFA HPI FAQ). The distressed sales that dominated 2009 to 2011 were often cash or non-conforming, so some of the deepest trades are thin in it. A neighborhood, a price tier, or a seasonally adjusted or purchase-only version of the same series would put the peak and the low in slightly different quarters and at different depths.
What this history cannot know
- Your house. Every figure is an area average. Renovations, condition, lot and price tier are not in it.
- Sales the index never sees. Cash, jumbo, FHA and VA purchases are not in the FHFA index, including many of the crash years’ distressed sales.
- Inflation. A recovery here is in the dollars of each date. In real terms every one of these recoveries took longer, since the peak’s dollars bought more.
- The next fall. The index is history. It is not a forecast and not an appraisal.
Sources
- FHFA House Price Index datasets, the quarterly master file for states, metros and the nation.
- FHFA HPI frequently asked questions, on what the index includes and its versions.
- FHFA HPI technical description, the repeat-sales method.
This guide is for informational purposes only. It is not an appraisal, and not financial, tax, lending or real-estate advice. Every estimate on this site tracks an area’s average, never a particular house. Confirm anything that matters with a licensed appraiser or your lender.
Last reviewed: September 2026 · Against the FHFA House Price Index master file (quarterly state and metro series through 2026 Q2).