Last Topic: 1:07:14am, 12/14/2020
Last Post: 3:26:54am, 03/28/2022
In the United States at least, the issue was three-fold. Interest rates were at record lows as stimulus to counteract the economic effects of the virus. This meant people could afford more house for the same monthly payments. Housing supply also dried up as people jumped from renting to buying due to lockdowns. This caused a massive spike in demand, which had the knock-on effect of draining supply since people who had homes didn't want to sell them. People who used to have to commute to offices suddenly found themselves being able to remote work so they were free to purchase homes in lower-priced areas, driving those up.
The end result was cheap loans and about a 40% lower housing supply than we've seen in years. However I have a feeling this is going to go away abruptly this sprint/summer. People have been holding off on moving because they're afraid they might not be able to buy a home after they sell theirs but eventually people *have* to move sometimes. The return to offices is also forcing some relocation. Finally, the effects of the virus on the economy are minimal now. With prices at all time highs, people are going to start bailing as fast as they can to catch the peak, and with interest rates set to rise about 7 times this year alone, we're going to see home prices naturally fall anyway. Already in some places, prices are starting to drop.
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