Housing costs across the United States have skyrocketed to astronomical levels in recent months. remote work may be responsible, according to new research From the Federal Reserve Bank of San Francisco.
Home prices rose 24% between November 2019 and November 2021, according to a study released Monday. Increased demand for working from home accounted for more than 60% of his overall price increases, and rents rose as well during that period.
San Francisco Fed economists August Kmetz and John Mondragon, and economist Johannes Wieland, an associate professor at the University of California, San Diego, say workers who can work remotely “have access to cheaper housing and more We were able to relocate to an attractive city.” As the office was closed to curb the spread of Covid-19.
Housing costs rose the most in these cities, while home price growth slowed in areas “less suitable” for remote work. Cities that have emerged as remote work hotspots during the pandemic include Charleston, South Carolina. Orlando, Florida.According to Wilmington, Delaware LinkedIn.
Researchers compared regions across the United States with similar levels of travel but varying degrees of remote workers during the pandemic to regions with different levels of travel but similar degrees of remote workers to find the impact of remote on housing demand. Isolate the impact of work and the impact of migration that fueled the pandemic.
Example: Remote work increased in both the San Francisco Bay Area and Tampa, Florida during the pandemic, but the Bay Area pandemic exodus Tampa population explodedStill, housing in both areas has become more expensive during the pandemic, says Wieland CNBC Make It.
This is because the option to work from home has enabled people to move farther away from their offices, motivating them to purchase larger homes to accommodate their new lifestyles. This was because there was a similar demand for new homes among them.
Even after adjusting for this shift, much of the impact of remote work on home prices remains. For every 1 percentage point increase in remote work, home prices increased by about 0.9 percentage points.Researchers also found a surge in remote work had the ‘same’ impact renta record high in the United States
“Our results suggest that the pandemic-driven rise in house prices reflects changes in fundamentals rather than speculative bubbles,” the authors write. “This means that the evolution of remote work could become a key determinant of future housing costs and inflation.”
The housing market is cooling down, but it’s still hot, thanks to you. to some extent, housing shortages, persistent inflation, and economic uncertainty.Earlier this week, average 30-year fixed US mortgage interest rate Rents reach 6.87%, highest since 2002 continue to soar in cities across the United States
Federal Reserve Chairman Jerome Powell told reporters .
“There was a huge imbalance … house prices were rising unsustainably fast,” Powell said. “In the long run, we need to better align supply and demand so that house prices rise at reasonable levels and at a reasonable pace so that people can afford to buy homes again.”