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Housing is still holding up the economy. It's so not like 2008

September 14, 2020. Summarized by summa-bot.

Single-family homes are seen in this aerial photograph taken over San Diego, California, U.S., on Tuesday, Sept. 1, 2020. U.S. sales of previously owned homes surged by the most on record in July as lower mortgage rates continued to power a residential real estate market thats proving a key source of strength for the economic recovery. Photographer: Bing Guan/Bloomberg via Getty Images

The stock market continues to be volatile and the job market is still in worse shape than where it was before Covid-19 plunged the United States into recession. But there is still one undeniable bright spot for America's economy: the housing market.

Strength in the housing market has helped power the CNN Business Back-to-Normal Index as well.

On the housing front, the index includes daily new home postings from Zillow (Z) and weekly loan applications from the Mortgage Bankers Association.

Low rates are one of the main reasons why home sales and prices continue to rise.

"Rising prices are just one more reason for people to leave expensive urban neighborhoods behind," said Redfin (RDFN) chief economist Daryl Fairweather in a report last week.

Redfin said in its report that media home sale prices rose 13% from a year ago to nearly $320,000 -- the highest price on record.

According to data from housing market and real estate analytics firm Meyers Research, prices for new homes rose solidly in July in Phoenix, Denver and Las Vegas as well as Sacramento and Riverside in California.

Meyers Research said in a report that "low mortgage rates and the desire for more space has pushed a lot of residents into homeownership," and residents of the pricier Los Angeles and San Francisco areas are the ones leaving for other cities.

"Today's low mortgage rates allow builders to raise prices without crushing demand," Wolf added.

Redfin's Fairweather is also worried that home prices could eventually become too high.

"Home-price growth this high is making the housing market especially difficult for first-time homebuyers right now," Fairweather said.

"Price growth may slow in 2021, but even if it does, high prices are going to continue to make affordability a concern for buyers. "

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