How did U.S. house prices react during the 20th Century?

Between 1997 and 2006, the American housing market saw a period of extraordinary growth, with prices rising by an average of 85%. The recent occurrence of the dotcom bubble caused the economists to start to worry about this. Although the housing bubble was not directly brought on by the dot-com bubble, it was greatly aided by the low interest rates and lenient lending guidelines that were implemented in an effort to boost the economy.

                                         Figure 10.1 Index of real house prices for the United States, 1890–2012⁷

Source: Boom and Bust

Prior to the 1970s, when house prices climbed much faster than the rate of inflation, house prices generally moved slowly, at a pace equal to or lower than inflation. There was a period of strong income growth and modestly dropping home prices from 1950 to 1970. (Primarily caused by The Great Depression). But, due to a rise in demand and a decrease in supply, this pattern was inverted during the 1970s, during which time housing prices quadrupled  and income fell sharply, resulting in unbalanced price-to-income ratios. The rising cost of housing created an unstable housing market where supply couldn’t keep up with demand.

Source: Decennial Census of Population and Housing American Community Survey Data (census.gov)

In the United States, housing booms are not a recent occurrence. The 20th century saw a number of booms. Yukio Noguchi and James Poterba looked at seven booms, brought on by excessive demand and inflation, occurred between 1976 and 1990 in several US states. Historically the busts have appeared to be less volatile since there seems to be a large stickiness and resistance to fast downward swings, even when fundamental factors would imply a collapse. Should these have foreshadowed what was to come and warned economists?