Pandemic Housing Market Creates Extraordinary Wealth

Many homeowners in the United States accumulated so much equity in such a short period of time. However, this fact is linked to the housing affordability crisis in America. The pandemic housing market creates extraordinary wealth for homeowners.

Homeowners in the United States have accumulated more than $6 trillion in housing value over last two years. However, this does not imply that homebuilders have spent $6 trillion on new homes. Or that existing homeowners have spent $6 trillion on kitchen and bathroom modifications.

The majority of this money has been generated by the fact that the cost of housing has increased. Housing, which is in short supply and in strong demand across America, has appreciated at an unprecedented rate during the pandemic. Millions of people have benefited from this windfall. It is broadly distributed across the 65 percent of American households that own their homes.

It’s a surprisingly good news for Americans who own a home. But for those who don’t, it’s inextricably linked to the housing affordability crisis. Rents are rapidly increasing for them. Inflation is eroding their earnings. And the exact thing that has created all of this fortune has put homeownership as a means of accumulating wealth even farther out of reach.