People are in a wild panic buying frenzy as home prices are rising across the globe. House prices in America surged 13.2% in March, compared to the same time last year. It's a perfect storm, historically low mortgage interest rates, low inventory of homes (down 20.5% in April compared to year before), more of us working from home, and a decade of building less homes than needed due to the 2008 financial crisis have caused prices to skyrocket to the moon.
Many have been fleeing large cities to the suburbs and rural areas, boosting demand for larger homes as they have been forced to transform their homes into offices and classrooms.
As a result, buyers across the country are getting into bidding wars and offering hundreds of thousands of dollars above asking prices for homes they haven't set foot in. On the flip side, a large chunk of the population is getting priced out of the market and affordable housing is nowhere to be found.
Short Squeez Takeaway: Home prices are not coming down any time soon but more people may decide to list their homes once the economy begins to recover and they go back to the office. Inventory should make bidding wars less necessary and prices should stop mooning but are still not expected to go down. A recent Reuters poll suggested that house values would rise by 10.6% this year, followed by a gain of 5.6% in 2022. (thots & prayers for anyone looking to buy right now)