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In order to most accurately determine prior market price cycles one must remove the effects of inflation and look at real historical prices. The past thirty years have seen three real price cycles in New Orleans. The prior New Orleans market downturn cycle of eleven years involved nominal price stagnation with inflation causing a decline in real prices of nearly 40%. Market cycle time periods have varied from the current growth cycle of 15 years to the downturn cycle of 11 years.

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The mortgage-debt-to-income ratio is commonly viewed as the most accurate method of determining market cycles. The past thirty years have seen three cycles and potentially the beginning of a fourth, all of which included large changes in home affordability. Fortunately, due in part to historically low mortgage rates, the current cycle has not come remotely near the all time highs of the early 1980s. Conversely, this means today’s New Orleans home prices have an above average mortgage rate fluctuation risk.