U.S. home prices are rising at the fastest pace in 15 years, reflecting how fiercely buyers are competing for a limited supply of homes in nearly every corner of the country.
From small cities like Bridgeport, Conn., to large ones like Seattle, prices have been steadily moving higher. Two closely-watched house-price indicators released Tuesday posted double-digit national price growth, demonstrating the widespread strength of the market.
A number of forces have merged to fuel the red hot housing market, including mortgage rates dropping below 3% in July for the first time ever. Millions of millennials are aging into their prime-homebuying years in their 30s. New-home construction has lagged behind demand and homeowners are holding on to their houses longer.
The coronavirus pandemic has turbocharged this demand. Many Americans sought homes with more space to work remotely during Covid-19, or felt freed to move farther from their offices.
At the same time, the pandemic worsened the already severe shortage of homes for sale. Low interest rates prompted more homeowners to refinance and stay put instead of moving. Others delayed their moves due to concern about virus exposure, according to real-estate agents. Even as home builders have ramped up the pace of new construction in an effort to keep up with demand, they are limited by rising material costs and shortages of land and labor.
