That gives some perspective to just how over-inflated our national housing bubble truly was in the previous decade. The annual price appreciation from 2000 through 2006 was quite remarkable.

The following shows U.S. home-price appreciation by year, beginning in 2000, according to the Federal Housing Finance Agency (FHFA). Keep in mind that this was on a national level, and that in some markets the increases were considerably higher.

2000: 6.76 percent
2001: 6.61 percent
2002: 7.47 percent
2003: 7.57 percent
2004: 9.78 percent
2005: 9.84 percent
2006: 3.12 percent
2007: -2.35 percent
2008: -9.95 percent
2009: -2.06 percent
2010: -4.28 percent
2011: -3.12 percent

Even after steadily falling for five consecutive years, home prices are still 50% higher than they were in January 2000, according to the S&P/Case-Shiller Home Price Index (which refers to a typical home located within the 20 surveyed metropolitan areas).

The price of new homes increased by 5.4% annually from 1963 to 2008, on average, according the Census Bureau. That period includes the enormous price bubble of the last decade.

However, taking a longer view, the average annual home price increase in the U.S. from 1900 – 2012 was only 3.1% annually. So, the bubble years were truly an anomaly.

Your parents and grandparents viewed their homes as places to live, eat, sleep, raise a family and create memories. A home was a shelter that would gradually increase in value over time. Prior generations did not view their homes as investments. There was no expectation that houses could be a means to get rich.

Homes require upkeep, maintenance, insurance, taxes and interest payments. Yet, home values steadily increased for many years, decade after decade. It was enough to overlook the associated costs of ownership.

According to the Census Bureau, median home values (adjusted for inflation) nearly quadrupled over the 60-year period from the first housing census in 1940 to 2000. The median value of single-family homes in the United States rose from $30,600 in 1940 to $119,600 in 2000, after adjusting for inflation.

Median home value increased in each decade of this 60-year period, rising fastest in the 1970s (43 percent) and slowest in the 1980s (8.2 percent).

This all occurred before the Federal Reserve initiated the housing bubble by slashing interest rates in response to the bursting of the tech bubble, which hammered Wall St. and its investors.

Let’s examine home price increases over the past four decades. None of the following Census Bureau figures are inflation-adjusted.

In 1970 the median home price was $23,400.
In 1980, the median price was $64,600 (176 percent increase).
In 1990, the median price was $$122,900 (90 percent increase).
in 2000, the median price was $169,000 (38 percent increase).
In 2010, the median price was $221,800 (31 percent increase).

The median home price peaked at $247,900 in 2007, the height of the housing bubble.

The median home price had advanced every year since 1963, with the exception of 1970 (when it dropped to $23,400 from $25,600 in 1969) and 1991 (when it dropped to $120,000 from $122,900 in 1990). In both of those years (’70 and ’91), economic recessions were occurring.

So, the bursting of the 2000s housing bubble was largely an anomaly, and the price decline was extraordinary. The median home price fell from $247,900 in 2007 to $232,100 in 2008. Then it fell yet again, to $216,700 in 2009. A decline in back-to-back years was unprecedented in the modern U.S. economy, and it had not been experienced since the dark days of the Great Depression.

The big question is, how have median home prices stacked up against median household incomes? In other words, have incomes kept up with the almost perpetual rise in home prices?

The Census Bureau publishes median household income data from 1967 until present day.

According to the Census Bureau, “household median income” is defined as “the amount which divides the income distribution into two equal groups; half having income above that amount, and half having income below that amount.”

The Census Bureau publishes both nominal (not inflation-adjusted) and inflation-adjusted figures for household income. Since we looked at nominal figures for home prices, we’ll do the same with household incomes.

In 1970, the median household income was $7,143.
In 1980, the median household income was $16,200 (126 percent increase).
In 1990, the median household income was $27,922 (72 percent increase).
In 2000, the median household income was $40,418 (44 percent increase).
In 2010, the median household income was $47,425 (17 percent increase).

We can see that median household income more than doubled from 1970 to 1980, climbing 126 percent. But then income growth slowed in the ensuing decades, rising 72 percent between 1980 and 1990, 44 percent between 1990 and 2000, and then just 17 percent between 2000 and 2010.

Clearly, median household incomes were not keeping up with the rise in home prices, decade after decade.

Let’s look at the comparison more closely.

While the median home price went up 176 percent from 1970 to 1980, median household income went up just 126 percent.

While the median home price went up 90 percent from 1980 to 1990, median household income went up just 72 percent.

While the median home price went up 38 percent from 1990 to 2000, median household income went up 44 percent.

While the median home price went up 31 percent from 2000 to 2010, median household income went up just 17 percent.

The only decade in which incomes gains eclipsed the rise in home prices was the 1990s. In every other decade, the increase in home prices significantly outpaced the rise in household incomes.

As if that wasn’t bad enough, the income numbers are quite different, and tell an even worse story, after adjusting for inflation.

In 1970, the inflation-adjusted median household income was $45,146.
In 1980, the inflation-adjusted median household income was $46,024.
In 1990, the inflation-adjusted median household income was $49,950.
In 2000, the inflation-adjusted median household income was $54,841.
In 2010, the inflation-adjusted median household income was $50,831.

This means that household incomes barely budged for a couple of decades, and then they went backward in the last decade. Americans are making roughly the same amount today, in inflation-adjusted terms, as they were making back in 1990.

Yet, the problem of falling incomes stubbornly persists. Median household income after inflation fell again in 2011, to $50,054. It was part of an ongoing pattern. Inflation-adjusted wages fell 0.4% in 2012, following a 0.5% decline in 2011. Simply put, wages aren’t keeping up with inflation.

Sixty-five percent of the jobs added to the U.S. economy since the recession officially ended have been lower wage jobs ($35,000 annually, or less). Those aren’t the kind of jobs that allow people to service an existing mortgage, buy a new home, or firmly entrench anyone in the middle class.

Given the steady increase in home prices and the rate of inflation in general, that’s been back-breaking for the typical American family.

Historically, from 1914 until 2012, the U.S. inflation rate averaged 3.36 percent. This means that your money has been losing roughly a third of its buying power each decade.

Given that inflation-adjusted median household incomes are now at the same level as in 1990, and that they are only marginally higher than in 1970, inflation has really punished most Americans and that is clearly seen in the housing market.

Since home prices are still well below where they were during the housing boom, when so many people bought into the market, millions of homeowners remain underwater.

A total of 13 million borrowers, or 25.4 percent of all homeowners with a mortgage, still owe more on their mortgages than their homes are worth, according to a new report from Zillow.

This prevents these people from moving and it is keeping millions of homes off the market. Another 9 million borrowers, while not entirely underwater, likely do not have enough equity in their homes to afford to move, according to Zillow.

That means a whopping 22 million homeowners are essentially stuck in their homes. This is limiting the supply of houses on the market and is driving up prices once again.

So, while home ownership was traditionally seen as the embodiment of the “American dream,” it has become a nightmare for millions of Americans. And for million of others, it is nothing more than a pipe dream, an aspiration that has become entirely out of reach.

Every time there is an increase in home prices, home owners cheer. Meanwhile, those on sidelines, who hope to one day become homeowners, watch as their dream seems to move further off into the ether.