Home prices are skyrocketing in most U.S. markets despite Covid-19, a recession and a shockingly high unemployment rate.
Many analysts are speculating that part of the boom in house prices is caused by Covid-19—that some people are concerned about Covid-19 contagion and don’t want to live in tight, multi-family buildings anymore, so they’re buying single-family homes in the suburbs. Another theory along the same lines is that because working from home has skyrocketed, some people want more space, so they’re buying larger single-family homes, especially if their kids are home all day, too. This seems to be happening in metro New York City, but what about places that weren’t hit as hard by Covid-19 and aren’t as dense as New York City?
Certainly the lower mortgage interest rates are a huge part of the current home price boom. The 30-year fixed-rate mortgage rate the first week of January 2020