‘Unhinged’ And ‘Abnormal’: Fed Warns Of Housing Bubble As Average Cost Of New Homes Hits Record High
New data from the Census Department released last week reveal that the average cost of a new home hit a record high in February at $511,000. Now, the Federal Reserve is warning about a housing bubble.
The Daily Wire’s Cabot Phillips joined Thursday’s episode of “Morning Wire” to explain more about the skyrocketing housing market.
Housing prices have spiked 25% over the past year, and since 2012, the cost of a new house has doubled, Phillips explained. “Cities with the biggest spikes were Phoenix, Miami, and Tampa, but overall, it was houses in southeastern states that saw the largest spike in 2021,” said Phillips to “Morning Wire” hosts Georgia Howe and John Bickley. “But again, it’s really everywhere across the country.”
Phillips was asked exactly why housing costs are spiking so much. He pinned the reasons on inflation, which is currently at an 8% year-to-year rate, rising costs for lumber and fuel, and the COVID-19 pandemic. “During the pandemic, new construction projects were halted across the board, and that means the number of houses now up for sale is far lower than usual. It’s simple supply and demand,” he said. “And unfortunately on that front, it will likely take years for new home construction to once again meet demand.”
Another reason for the high demand, and consequently high prices, of new houses is the shift to remote work during the pandemic. As people were allowed to work their high-paying jobs from home for companies in big cities like Los Angeles and New York, they were able to leave those cities and live in smaller, cheaper neighborhoods. This set off bidding wars, Phillips explained. – READ MORE
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