The COVID-19 pandemic has been fueling a major boom in the U.S. housing market, and prices have risen at a rate not seen since the mid-2000s. The year-over-year percent increase in the S&P/Case-Shiller National Home Price Index hit 14.58% in April, its highest value in the history of the series. In this post, we’ll look at how this surge in house prices is playing out across individual U.S. states.
The first GeoFRED map shows post-pandemic house price growth in each state in January 2021, and the second map shows pre-pandemic growth in January 2020. This measure of growth in house prices is the percent increase in the median listing price per square foot compared with a year ago. Both maps are included to get a quick sense of which states saw recent house prices increases that were demonstrably higher than their “usual,” pre-pandemic levels.
The presence of darker colors throughout the 2021 map reflects much higher post-COVID house price growth overall—in fact, in nearly all states. The national median values were 4% in January 2020 and 17% in January 2021. However, some areas had particularly dramatic increases, notably on the coasts and in some of the mountain states. For example, California saw a 3.5% increase in its median listing price between January 2019 and January 2020, but an almost 50% increase between January 2020 and January 2021.
The difference for the Midwest, on the other hand, is not as stark. But there are some exceptions: Tennessee, Michigan, and Minnesota saw notable changes from their pre-pandemic values.
Why have house prices risen more in some places than others? Home prices historically rise more in the expensive cities on the east and west coasts, with their more constrained supply. Many people anticipate working in the office less often, so increased demand for housing in the suburbs interacts with these areas’ low supply (and ability to build additional housing), which drives up prices more in these already high-priced regions.
Interstate relocation plays a role as well. The potential for remote work has workers seeking housing in historically low-priced markets that previously did not have major job hubs as the coasts do, resulting in price increases elsewhere.
How these maps were created: From the GeoFRED homepage, select “Build a New Map.” From the “Tools” menu, open the “Choose Data” tab and change Region Type to “State,” Data to “Housing Inventory: Median Listing Price per Square Feet,” Units to “Percent Change from Year Ago,” and Date to “2021 January” (and then “2020 January”). The legend can be modified under the “Edit Legend” tab.
Suggested by Victoria Gregory and Joel Steinberg.