After plateauing between 2017 and 2019, house prices in the United States saw a dramatic increase in 2021 and 2022. The average sales price of a new home in 2020 was 391,900 U.S. dollars and in 2022, it reached 540,000.
What drives the increase in house prices?
One of the major factors behind the dramatic increase in house prices was the low cost of borrowing. In 2020 and 2021, mortgage rates reached a historic low: Homebuyers could take out a loan with a 15-year mortgage rate of less than 2.5 percent. Demand rose and in 2021, the number of housing transactions peaked at almost seven million.
How has the coronavirus (COVID-19) pandemic affected Americans’ homeownership plans?
Overall, the coronavirus (COVID-19) pandemic has positively influenced the homeownership plans of Americans in 2020. According to a survey among U.S. adults, 28 percent of Millennials were more interested in buying a home due to the coronavirus pandemic compared to 13 percent who were less interested.
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