2020s United States housing bubble
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The 2020s United States housing bubble was a sharp run up in housing price values in the United States that started during the COVID-19 pandemic and the fiscal and monetary policy that followed.[citation needed] Housing prices increased nearly 50% nationally in the first 4 years of the 2020s.[1][better source needed]
Causes
There was a series of Coronavirus relief bills and paycheck protection programs in 2020 and 2021.[2][3][original research] The Federal Reserve also eliminated the reserve requirement from 10% to 0% for large banks on March 26, 2020, causing money supply to increase over 25% year-over-year by February 2021.[4][5][original research]
Mortgage interest rates
Interest rates on mortgages fell to an all-time low of under 3% on a 30-year fixed rate mortgage in July 2020. With low interest rates and COVID relief cash, banks set a record of $4.1 trillion in 2021[failed verification] and $4.4 trillion in 2022 of mortgage purchases and mortgage refinancing,[6] causing a housing inventory record low by January 2022.[7][better source needed]
Rent
Average rent prices increased over 20% nationally within the first 2 years of the pandemic, much more quickly than rent increases during the 2000s United States housing bubble.[8][failed verification]
See also
- 2020s commercial real estate distress
- Housing crisis
- Homelessness in the United States
- 2020s commodities boom
- 2021–2023 inflation surge
References
- ^ Fox, Matthew. "US home prices have soared 47% so far this decade, outpacing all of the growth seen in the 1990s and 2010s". Business Insider. Retrieved 2024-07-25.
- ^ Oversight, Pandemic (October 4, 2022). "The Six Laws that Funded Pandemic Relief Programs | Pandemic Oversight". www.pandemicoversight.gov.
- ^ "USAspending.gov". www.usaspending.gov.
- ^ https://www.federalreserve.gov/covid-19-supervisory-regulatory-faqs.htm#:~:text=Q%3A%20What%20changes%20has%20the,in%20response%20to%20COVID%2D19%3F&text=A%3A%20On%20March%2015%2C%20the,the%20next%20reserve%20maintenance%20period.
- ^ "What did the Fed do in response to the COVID-19 crisis?". Brookings.
- ^ https://www.philadelphiafed.org/-/media/frbp/assets/economy/articles/economic-insights/2022/q3-q4/eiq3q422-the-pandemic-mortgage-boom.pdf
- ^ Ullrich, Jess (2024-05-07). "Why Is There A Housing Shortage In The U.S.?". Bankrate. Retrieved 2024-07-26.
- ^ Loewenstein, Lara; Meyer, Jason (February 27, 2024). "Comparing Two House-Price Booms". Economic Commentary (2024–04). doi:10.26509/frbc-ec-202404 – via www.clevelandfed.org.