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Here’s exactly how much remote work is to blame for the surge in home prices

Home prices rose dramatically during the pandemic and the chief cause, according to new research, was the widespread embrace of remote work — more so than low mortgage rates or fiscal stimulus.

Exactly how much? A paper published this week by two California economists calculated that the mass shift to remote work accounted for 15.1 percentage points of the 24% increase in US home prices between November 2019 and 2021.

Put another way: more than half of the overall growth in house prices in the pandemic can be attributed to demand spurred by remote work, according to John Mondragon, an economist at the Federal Reserve Bank of San Francisco, and Johannes Wieland, an economics professor at UC San Diego.

The research, which controlled for migration during COVID, found that US metro areas that had the highest shares of remote workers during the pandemic also saw the highest increases in home prices.

The paper also found the effects of demand driven by remote work had an “almost identical” impact on the rise in rent prices.

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