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The housing market boom could last a little longer than expected, experts say

Last month, CNN’s Before the Bell observed early signs that rising prices could hurt demand and ease home refurbishment spending, which could lead to a chilling global housing market. According to the S & P Core Logic Case-Shiller Index released this week, US home prices in June were up 18.6% compared to a year ago and 16.8% compared to May. In Phoenix, home prices rose 29% year-on-year and San Diego rose 27%. This is the third consecutive month that the rate of increase in house prices has reached a record high. Video above: How the pandemic is first maintained-House buyers in time from the market In the UK, UK annual home price growth was 10.5% in July, according to new data from the National Building and Loan Union. It rose to 11% in August. According to CoreLogic’s latest home prices, prices rose 2.1% month-on-month, the second largest monthly rise in 15 years. In Australia, home prices still rose 1.5% in August, although there are signs that the housing boom has eased. index. According to CoreLogic, this growth rate is “well above average.” The Reserve Bank of New Zealand recently said home prices are “above sustainable levels.” Despite some buyers ridiculing the scale of recent price increases, low borrowing costs and telecommuting upgrades still support demand. But in a research note released this week, Goldman Sachs highlighted another factor. Interest rates and the shift to telecommuting are also stimulating housing demand, and one of the reasons the price boom is undervalued is that housing supplies are so tight, “said investment banking economists. increase. House. However, according to Goldman, this has not happened due to lack of raw materials and labor, and land regulations. “Temporary bottleneck mitigation, such as material constraints and pandemic labor supply effects, should support a final supply recovery …. More permanent constraints, such as land use restrictions, will be in the future. It should continue to push up house prices in the quarter, especially in the US, Canada and the UK. ” Supply problems can push prices up for some time.

Last month, CNN’s Before the Bell Early signs observed The red-hot global housing market may have begun to cool as rising prices seemed to hurt demand and ease home renovation spending.

Maybe it was too early to call the top.

what’s happening? According to the S & P Core Logic Case-Shiller Index released this week, US home prices in June were up 18.6% compared to a year ago and 16.8% compared to May. In Phoenix, home prices rose 29% year-on-year, while in San Diego they recorded a 27% rise.

This is the third consecutive month that the rate of increase in house prices has reached a record high.

Video above: How a pandemic keeps first-time homebuyers away from the market

In the UK, the annual rate of increase in home prices rose from 10.5% in July to 11% in August, according to new data from the Nationwide Building Society. Prices rose 2.1% month-on-month, the second largest monthly rise in 15 years.

In Australia, there are some signs that the housing boom is easing, but according to CoreLogic’s latest home value index, home prices in August were still up 1.5%. According to CoreLogic, this growth rate is “well above average.” The Reserve Bank of New Zealand recently said home prices are “above sustainable levels.”

What do you get? Despite some buyers ridiculing the scale of recent price increases, low borrowing costs and telecommuting upgrades still support demand.

But in a research note released this week, Goldman Sachs emphasized another factor.

“Low interest rates on mortgages and the shift to telecommuting are also stimulating housing demand, but one of the reasons the price boom is undervalued is that housing supply is so tight,” said an investment banking economist. That’s it. “

Price increases usually bring a boom to the construction of new homes. However, according to Goldman, this has not happened due to lack of raw materials and labor, and land regulations.

“Temporary bottleneck mitigations such as physical constraints and pandemic labor supply effects should support a final supply recovery, but more permanent constraints such as land use restrictions will be housing in the coming quarters. It should continue to push prices up, especially in the US, Canada and the UK. “

So even if demand fluctuates, supply problems can push prices up for some time.

The housing market boom could last a little longer than expected, experts say Source link The housing market boom could last a little longer than expected, experts say

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