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U.S. Home Prices Pass 2005’s Peak Level

“Where’s the inflation?” Central Bankers will undoubtedly and rhetorically ask critics and skeptics at a variety of upcoming speeches. 

Meanwhile, U.S. housing prices have finally eclipsed their peak from 2005 in the years leading up to the Great Recession. Note that at the beginning of 2021, we said real estate was entering the year in a “massive bubble”. 

A combination of low interest rates and trillions in freshly printed dollars has led to the the median price of a single family home rising 14.9% to $315,000 in Q4. It was “the biggest surge in data going back to 1990, according to the National Association of Realtors,” according to Bloomberg.

“Prices rose in all 183 metros measured by the group and 161 had double-digit growth compared with just 115 of them in the third quarter,” the report notes.

The move was most pronounced in the Northeast, which saw a 21% gain as a result of buyers leaving cities and flocking to the suburbs. Fairfield County, Connecticut led the way, rising 39%. We have written extensively, not just about families moving to the suburbs, but also corporations. Over the past year, we’ve presented a ton of evidence (see: here & here & here) of city dwellers fleeing for the exits, some of which was due to the virus pandemic unleashing a technological wave of remote working, allowing these folks to work anywhere with an internet connection. 

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