Why Are Home Prices Rising So High? Blame Record-Low Mortgage RatesPosted by: jhon | Posted on: October 19, 2020
When the coronavirus pandemic gutted the strongest U.S. economy, many assumed another recession would bring rock-bottom home prices along with it. Instead, home prices defied logical assumptions—and soared to new heights.
Paradoxically enough, one of the biggest drivers of the double-digit price hikes is the very same record-low mortgage interest rates that put homeownership within reach for the masses. They fell to a new all-time low of 2.81% in the week ending Oct. 15, according to Freddie Mac. That’s shaved a considerable amount off of monthly mortgage payments, allowing buyers to stretch their budgets further.