The alarm of runaway home prices

Home prices continue to reach record highs, the U.S. government is beginning to face increasing pressure around its monetary policy that has kept mortgage rates very low, and helped fuel the blazing housing market. The median existing home price rose 15.8 percent year over year in February to $313,000. In many markets, the prices continue to rise. With the Great Recession still in many leaders’ minds, advocates are encouraging the government to take a careful approach to how it handles mortgage-backed securities this round. With signs pointing toward a conclusion to the pandemic sometime in the summer, the tight inventory that has served as the limiting reagent to the housing market may increase and mortgage rates along with it, which will dampen home price appreciation and lead to a more balanced market.