In the wake of the short but steep COVID-19 recession, house prices have risen at record levels in recent months, hitting the peak increase of 19.3 percent in July 2021 (Chart 1). These double-digit increases represent a stark departure from what occurred before the pandemic—from early 2013 to early 2020—when house prices rose at a moderate annual rate of about 5 percent and exceeded the rate of increase in rents. The resulting rising house-price-to-rent ratio, a barometer of relative housing costs, reflected a moderate prepandemic increase in house valuations. This rise was the product of a limited increase in the ... (full story)