While most economic indicators deteriorated last year, house prices largely shrugged off the effects of the pandemic.
Of the over 60 countries that enter into the IMF’s Global House Price Index, three-quarters saw increases in house prices during 2020, and this trend has largely continued in countries with more recent data.
IMF research indicates that low interest rates contributed to the boom in house prices, as did policy support provided by governments and workers’ greater need to be able to work from home. In many countries, including the United States, online searches for homes reached record levels.
Along with these demand factors, house prices also increased as supply chain disruptions raised the costs of several inputs into the construction process.