Remote Work a Key Factor in the Rise of Home Prices

Research from the Federal Bank of San Francisco reveals that remote work caused over 60 percent of the sharp rise in home prices during the pandemic, reports Catarina Saraiva for Bloomberg. Average house prices increased by 24 percent between November 2019 and November 2021. Meanwhile, remote work remains popular, with 30 percent of workers still working from home, a rate three times larger than before the pandemic.

“The authors, who adjusted housing data to account for the migration from expensive cities to more affordable areas that occurred during the pandemic, found that each 1 percentage point increase in remote work results in about a 0.9 percentage point increase in house prices.” According to the Fed’s report, “This suggests that the fundamentals of housing demand have changed, such that the persistence of remote work is likely to affect the future path of real estate prices and inflation.”

While rates of remote work vary vastly between different cities, home prices remain high around the country as workers continue to spread out and seek larger homes to accommodate home offices and new household arrangements.