According to the new report released by the Redfin, the prices of the affordable homes in the United States have increased 5.5% during the ongoing Covid-19 pandemic. On the other hand, the prices of the most expensive homes increase by 2%.
The trend of increasing the prices of affordable homes continues after the WHO declared the Covid-19 as global pandemic on March 11, 2020. The overall gap between the bottom and top tier growth rates had widened to 3.5%.
On the other hand, the prices of the most affordable homes in Newark, New Jersey increases 14.7% year on year and reach the median of $211,281 during the pandemic.
Agent of Redfin in Dallas, Pan Henderson said, “Spending so much time at home during quarantine has made a lot of people realize that it might be time to stop renting a cramped apartment in the city and time to start owning their first single-family home.”
“With mortgage rates at record lows and remote work on the rise, some renters are having an epiphany: They could buy a lower-priced home in the suburbs for close to what they’re paying in rent,” Pan Henderson further added in the statement.
Redfin Lead Economist, Taylor Marr said, “The severe shortage of affordable homes that we’ve been grappling with for years is now being exacerbated by an increase in the number of buyers who are in search of lower-cost houses.”
“Many Americans—especially millennials—were already toying with the idea of buying their first house before the pandemic. Now they’re actually taking the plunge because mortgage rates are so low and it’s less attractive to live in a small apartment right next to the office,” Taylor Marr added.
“Fortunately, mortgage payments are actually lower now than they were a year ago, despite the growth in home prices, because mortgage rates have dropped so much; the median monthly payment on a home listed in May fell to $1,170 from $1,225 during the same period the prior year, despite an $18,000 rise in asking prices,” Taylor Marr concluded.