Jan. 4 (UPI) -- The Federal Housing Finance Agency said Monday some of the smaller metropolitan areas in the country are showing some of the strongest home price gains amid the coronavirus pandemic.
While cities along the East and West coasts have typically experienced the lion's share of home price gains, the metro areas of Cincinnati, Cleveland, Indianapolis, Kansas City, Memphis and Pittsburgh, along with Austin, Texas, and Boise, Idaho, are seeing the strongest price gains now, the agency said.
Home prices in those areas are now 10% higher than in 2019.
"Although the full history of the pandemic's impact on housing prices is yet to be written, the data from the last several months are consistent with the view that COVID has encouraged potential buyers to move from urban apartments to suburban homes," Craig J. Lazzara, managing director and global head of index investment strategy at the S&P Dow Jones Indices, said in a statement.
Peter Boockvar, managing director with Bleakley Advisory Group, said the price gains, though, are making mortgage rates, which are near record lows, much less attractive.
"These price gains are completely offsetting the benefit of lower mortgage rates, and it takes even more to come up with a down payment, which is a big deal for that first-time buyer, less so for others," Boockvar said. "Another of the Fed's unintended consequence of hurting those that are least able to afford it."
Attom Data Solutions reported the median price of homes in 55% of counties around the country were considered less affordable at the end of 2020 for the average wage earner than what they have been historically.