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HomeUSPandemic home price boom is NOT going bust: Home prices nationwide are...

Pandemic home price boom is NOT going bust: Home prices nationwide are up 0.6%


Property prices, which have soared during the pandemic, have yet to hit the long-awaited crash.

Some pundits expected the house price boom to turn into a slump after the Fed launched an aggressive campaign of interest rate hikes late last year.

However, the latest data shows that prices defied bleak forecasts and actually rose a modest 0.6% last month.

Figures from the Federal Housing Finance Agency (FHFA) show housing prices across the country rose 3.7% from the same period last year.

Compared to pre-pandemic 2019 prices, housing prices remain around 40% higher.

Property prices, which have soared under lockdown, have yet to collapse after interest rate hikes

Home prices in the 20 major U.S. cities edged down 1.1% in April from the same time last year

Home prices in the 20 major U.S. cities edged down 1.1% in April from the same time last year

However, the monthly S&P Case-Shiller index of house prices in 20 major cities showed a slight 1.1% decline in April from the same period last year, the first decline since May 2012.

Seattle, whose prices were down 12.4% year-on-year, saw the largest drop, followed closely by San Francisco, which fell 11.2%, and San Diego 5.3%.

While Miami, up 7.7%, Tampa, up 4.8%, and Charlotte, up 4.7%, posted the highest annual gains.

“Two months of price increases is not a definitive recovery, but March results suggest that the decline in home prices that began in June 2022 may have ended,” S&P DJI chief executive Craig Lazzara says Trading Economics.

“That said, the challenges posed by current mortgage rates and the continued possibility of economic weakness should remain a headwind for house prices for at least the next few months,” he added.

Rising mortgage rates have reduced the supply of homes in the market as potential sellers are unwilling to part with their cheap mortgages, secured before the rate-tightening cycle.

The number of homes sold fell 22% in March this year compared to the same month the year before, according to the National Association of Realtors.

Lack of supply can help keep prices high as the market is high priced and low selling.

San Francisco and Oakland both saw six-digit price declines from last year, with the median value dropping by $220,000 and $174,000, respectively, according to data published by Redfin last week.

“Pandemic boom towns and expensive coastal markets are seeing historic declines in home prices,” the report released on May 22 discerned.

These districts also have high crime rates — rates that escalated into double digits during the pandemic and, in most cases, have continued to persist.

Higher mortgage rates have also played a role in the declines seen in these heavily populated areas – as they continue to deter buyers and sellers from moving forward with potential transactions.

A recent study found that San Francisco is the most expensive US city to raise a child in, costing over $35,000 a year.

At the same time, residents say San Francisco is increasingly looking like a ghost town, with dozens of retailers leaving town due to crime and poor foot traffic.

A disturbing recent report showed that 95 retailers in downtown San Francisco have closed since the start of the COVID pandemic, a drop of more than 50%.

Of 203 retailers that opened in the city’s Union Square neighborhood in 2019, only 107 are still in business, down 47% in a few pandemic-ravaged years.

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