Artwalk condos. Fengshui North American house prices soar? Despite the severe economic impact of the COVID-19 outbreak, the US real estate market is still very strong, with house prices rising by double digits, while Canada’s real estate market is heating up.
After eight years of strong house price growth, the huge housing boom in the United States continues unabated. By the second quarter of 2021 (adjusted for inflation), the seasonally adjusted S & P / case-Schiller national house price index soared 12.56 per cent, up from 3.75 per cent the previous year and the largest year-on-year increase in history. This is supported by data released by the Federal Housing Finance Agency, which shows that its seasonally adjusted US house price index rose 11.99% year-on-year in the second quarter of 2021 (adjusted for inflation). This is much higher than last year’s 5.45% and the highest annual growth rate on record.
The S&P/Case-Shiller index rose 2.84% month-on-month in the second quarter of 2021, while the FHFA index rose 2.52%.
In July 2021, sales of existing homes in the United States rose 1.5% from a year earlier to a seasonally adjusted 5.99 million units. On the other hand, sales of new single-family homes fell 27.2% year-on-year to a seasonally adjusted 708000 units. Robert Dietz, chief economist of the American Association of Home Builders (NAHB), said that while interest in buying homes continued to be strong, limited supply, rising prices and access to materials limited sales of some new homes and led to a decline in the number of homes built.
According to the American Association of Home Builders (NAHB) / Wells Fargo Housing Market Index (HMI), US homebuilder confidence fell to a 13-month low of 75 in August 2021 due to high house prices and persistent supply shortages. A reading of 50 is the midpoint between positive and negative emotions.
The Fed recently raised its economic growth forecast for 2021 to 7 per cent from its previous estimate of 6.5 per cent, as vaccine distribution accelerated and the government introduced new stimulus measures. Last year, the US economy contracted by 3.5 per cent, the biggest decline since 1946.