Home prices rose 19.2% in January S&P CoreLogic Case-Shiller Index. It is extremely difficult for millennials and Gen Z to enter the housing market, as home prices are 75% higher today than in 1987 – and this is exactly when the index first started tracking prices. The organization addresses the challenges young people face:
“While the re-acceleration of home price gains may be concerning and likely discouraging for first-time and younger buyers, it is nevertheless unsurprising considering the dire inventory of for-sale homes, which continues to decline and continually record new lows. Additionally, with mortgage rates jumping to three-year highs, existing homeowners now have little incentive to sell and buy a new, more expensive home with a higher mortgage rate. As a result, homebuyers that remain in the market are once again faced with a very competitive buying environment.”
The epidemic, combined with extremely low rates, fueled this purchase frenzy. Collectively, home prices in the United States have risen 31% since March 2020. Although rates have risen over the past week and mortgages have hit about 5%, there is no indication that demand has declined significantly. The remote working age has allowed New York-level wage earners to move to areas with lower tax rates and lower crime rates. It has become a new form of politeness in the Corona era.
Home prices are rising everywhere as supply cannot meet demand. Some areas exceeded 19.2% growth. The 10-city combination is 33% higher than the peak period in 2006, and the 20-city combination is up a staggering 40%. America is looking at the housing crisis if inflation does not subside and a generation is more likely to become dependent on rent and delay households.