US home prices have surged 47% since the start of 2020
Madison Ventures managing director Mitch Roschelle analyzes the housing market and reveals some of the best places to live outside of big cities on 'The Big Money Show.'
Home prices have surged 47.1% since the start of 2020, easily outstripping the gains seen in recent decades.
That's according to a recent analysis by ResiClub of the Case-Shiller National Home Price Index, which showed that house prices in the 1990s and 2010s grew a respective 30.1% and 44.7%.
On top of that, home price growth so far this decade is on the verge of surpassing all the growth seen in the 2000s. During that time period, housing prices skyrocketed 47.3%, including an 80% spike before the 2007 housing market crash.
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Homes in the Issaquah Highlands area of Issaquah, Washington on Tuesday, April 16, 2024. (David Ryder/Bloomberg via Getty Images / Getty Images)
There are a number of driving forces behind the spike in prices.
Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates and expensive construction materials.
Available home supply remains down a stunning 34.3% from the typical amount before the COVID-19 pandemic began in early 2020, according to a separate report published by Realtor.com.
Higher mortgage rates over the past three years have also created a «golden handcuff» effect in the housing market. Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further and leaving few options for eager would-be buyers.
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Economists predict that mortgage rates will remain elevated in
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