“Housing is likely to emerge as the winner of this crisis,” said Esti Dwick, head of global market strategy for Netixis Investment Managers.
“Interest rates should stay low even longer. So I don’t expect housing to be another shoe for the economy,” Dweck added.
“The sudden emergence of revert work has allowed homebuyers to expand their search into more affordable areas.”
Migration continues in the suburbs
Redfin said in its report that media home sale prices rose 13% from a year earlier to about 20 320,000 – the highest price on record. What’s more, the recent increase in outstanding home sales and new home listings were the highest since 2015.
The housing market on the west coast is particularly hot. New home prices rose strongly in July in Phoenix, Denver and Las Vegas, as well as in Sacramento and Riverside, California, according to data from housing market and real estate analytics firm Meyers Research.
Meyers Research said in a report that “low mortgage rates and the desire for more space have pushed many residents toward homeownership,” and residents of the Los Angeles and San Francisco areas are moving to other cities.
At times prices can become very high. Builders want to cool the red-hot housing market a bit.
“Land is a precious and limited commodity. Builders need to be careful not to sell too much of it too quickly so many people will deliberately slow sales,” said Ali Wolf, chief economist at Meyers Research.
Wolf added, “Today’s low mortgage rates allow builders to raise prices without increasing demand.”
Redfin’s Fairweather also worries that home prices could eventually go too high. This will be especially problematic for tenants who do not have the benefit of taking cash in an existing building to trade.
“This rise in house prices is making the housing market difficult, especially for first-time homeowners right now,” Fairwood said. “Price growth may slow down in 2021, but even if it does, high prices will continue to be an affordable concern for buyers.”
.
