U.S. Home Prices Post Record Gain, Surpassing Pre-Crash Peak
February 16, 2021
U.S. home prices have finally surpassed their previous peak set in the years before the housing crash and Great Recession. The median price of a single-family home climbed 14.9% to $315,000 in the fourth quarter of 2020. According to the National Association of Realtors, this is the biggest single-quarter jump on record, with data going back to 1990.
A number of factors are driving the price gains, which continued apace throughout all of last year, despite the coronavirus crisis. Historically low inventory and strong demand, fueled by the rise in remote work allowing residents to leave expensive cities, have driven prices up, and low mortgage rates have allowed buyers to finance pricier homes.
An economist from the National Association of Realtors speaking to Bloomberg expressed concerns about how long the housing market’s run can continue, noting that prices are rising faster than income and that working-class families may soon see themselves priced out of the market.