Backed by record-low mortgage rates and limited supply, US home prices are set to overcome the economic drag brought by the novel coronavirus pandemic, according to a Reuters poll that foresees home prices beating consumer prices this year and next.
According to the June 9-19 survey of over 40 housing strategists, housing prices will record a 3.0% increase this year until 2021. Three months earlier, they were expected to advance by 3.4% in 2020 and 3.2% in 2021. This suggested that the outlook is stable despite sharp economic records and unemployment reaching levels not monitored since the Great Recession.
These inflation-beating predictions could be attributed to mortgage rates reaching historic lows and housing undersupply. In addition to this, the Federal Reserve had set its inflation forecast at 0.8% for 2020 and 1.6% for 2021.