Housing prices being driven up by migration to South and West, data shows
Story at a glance
- New data from Freddie Mac identifies four main drivers of increasing home prices.
- Limited supply, low mortgage rates, an aging population and the pandemic have all contributed.
- The data has joined the group of other research noting a shift in where Americans are choosing to live, avoiding major cities and settling on small or midsized cities in the South and West.
New research from Freddie Mac, the federal home loan mortgage corporation, states that low mortgage rates, limited supply and increased migration to the South and West have driven up home prices.
The research, published in an online research note on Thursday, states that home prices have gone up across the country by 33 percent over the past two years.
In addition, Freddie Mac found “a race to beat future rate increases” and a record number of people in the typical age range for first-time home buying. The research notes that there are now 46.1 million people in the United States between the ages of 25 and 34, 18 percent more than there were in 2006, which has driven up demand for single and multifamily housing.
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Research crafters note however, that there are other factors playing a role in the increasing prices of housing including the pandemic and the subsequent need for more space and home offices as well as government stimulus funds.
In fact, a recently published working paper from the National Bureau of Economic Research claims that the national shift to remote work accounted for over half of the 23.8 percent increase in housing prices between 2019 and 2021.
Although fewer Americans moved in 2020, where Americans are choosing to pick and go has changed during the pandemic. Data from Freddie Mac joins the collection of research pointing out that the COVID-19 pandemic sped up the migration out of large cities that has been taking place over the last 20 years.
As of February 2022, people are leaving the country’s 25 largest cities at a three-time higher rate than they did pre-pandemic, according to Freddie Mac, with the greatest number of people moving to small and midsized cities in the South and Mountain West.
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Source: TEST FEED1
