The Covid-19 pandemic did more than temporarily change how and where people live. Government actions over the past three years, along with more freedom for many to work remotely indefinitely, will impact housing affordability, the number of homes available for sale and people’s housing choices for years to come, according to two new reports released today by Bright MLS.
The research, which was conducted in partnership with George Mason University, examined home sales transactions within the Mid-Atlantic region between 2018 to 2023 to assess the long-term impact of the government’s COVID-19 response and remote work on the housing market.
“The pandemic upended the housing market, opening up new homeownership opportunities for many and prompting others to re-evaluate where they wanted to live and what they wanted in a home,” said Dr. Lisa Sturtevant, Bright MLS Chief Economist. “Our research shows the pandemic-era federal stimulus payments and monetary policy, along with remote work, allowed more people to become homeowners, especially individuals and families with traditional lower homeownership rates. However, those same policies had a major impact on affordability, supply and home preference that will shape the housing market for at least the next three to five years.”
Housing affordability
Low rates and increased savings fueled demand, causing home prices across the U.S. to rise very quickly. In the Mid-Atlantic, home prices rose by more than 40% between 2020 and 2022, a faster pace of price growth than during the housing market bubble of 2005 – 2007. As a result, housing affordability is now at its lowest level on record with a household needing an income of more than $120,000 to buy the typical home in the region.
“Higher prices, along with mortgage rates that ultimately moved higher, are pricing many people out of the market, particularly first-time homebuyers. Delaying homeownership delays wealth creation. Although some benefited during the…
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