A recent Reuters poll indicates that house prices in the US could continue their upward climb in the next couple of years, despite the economic damage caused by the ongoing coronavirus pandemic. Economists expect the US Case-Shiller house price index to rise by 5.7% in 2021 and by 4.6% in 2022 – the highest forecasts on record.

In addition, most of the analysts polled expected housing market activity across the US to pick up pace in the current year. Despite the latest wave of fresh infections that have hurt economic recovery in the near term, the risk of it holding back growth in the housing market was marked as low to very low by 85% of the poll’s respondents.

The demand for housing is expected to surge mainly on the back of expectations for economic recovery in 2021. In addition, the need for larger living spaces, Fed’s dovish monetary policy and the optimism surrounding the rollout of COVID-19 vaccines are also expected to support the growth in the housing sector.

Home prices across the US have been increasing fueled by a rise in demand even as supply of homes has contracted to a third of healthy levels. In October 2020, existing home sales soared to 7 million units – the highest level in almost 15 years, driving up construction activity to keep pace with the rise in demand.