Record high prices for US residential real estate
The shortage of residential properties due to high mortgage interest rates and construction costs makes this possible.
Source: Standard & Poor’s
Residential real estate prices in the USA recently reached a new record high, although it is only just above the previous high of 2022 (see chart). The Case-Shiller house price index from S&P CoreLogic, which tracks price developments for twenty US cities, recently rose at an annual rate of around 4%. The Federal Housing Finance Agency (FHFA) house price index even climbed by over 6%. This is the strongest increase since the end of 2022.
The American residential real estate market has digested the high interest rates this year – taking out a 30-year mortgage costs over 7% – and the increased construction costs surprisingly well. The increase in the cost of building houses has not only significantly reduced demand, but also supply on the US real estate market. The remaining prospective buyers have faced increasing competition for the scarce supply of real estate on the market in recent months. The shortage is driving up prices.
Given the prospect of further falling interest rates and the stable economic development in America, demand is not expected to be subdued for the time being. US real estate prices could therefore continue to rise in the coming months.
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2023-12-07 15:30:25
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