Rocky Mountain communities where people spent the most time at home during the COVID-19 pandemic, including those in New Mexico, were also among the communities that saw the most significant growth in housing prices, according to a new report from the Federal Reserve Bank of Kansas City.
The report, published earlier this month, tracks shifting mobility patterns and home price growth in communities in New Mexico, Colorado and Wyoming during the latter stages of the pandemic.
While many communities experienced home price growth over the past two years, the report showed a correlation between reduced mobility and higher home price growth.
According to the report, cities and counties in New Mexico and Colorado, which had significant state-level public health measures, broadly saw greater increases than those in Wyoming, Kansas, Missouri, Nebraska and Oklahoma, where state-level health measures were more limited and mobility returned to normal more quickly.
Nick Sly, Denver branch executive for the Federal Reserve Bank of Kansas City and co-author of the report, said the findings held true in both urban and rural communities, and across housing price points.
“It holds even when we don’t count those other factors that are typical drivers of housing price growth,” Sly said.
In New Mexico, Valencia and Sandoval counties were listed among the communities where residents spent more time at home during the latter stages of the pandemic. The two counties saw housing price growth averaging around 20%, according to the Federal Reserve. On the other hand, counties such as Luna, and McKinley, where mobility patterns didn’t change as much as much saw lower housing price growth, at roughly 12%. Bernalillo County saw mid-tier home prices grew annually by approximately 18% during the latter part of 2021.
Bethany Greene, research associate with the Kansas City Fed and co-author of the report, pointed to two factors that may be driving the trend. On the supply side, Greene said people using their homes to live, work and learn may be more reluctant to put those homes on the market, which suppresses the number of homes available for sale.
However, some homeowners also used this period to find housing that better fit their new remote needs. As remote work and remote learning became more popular, Greene said homeowners have sought more space and different amenities that fit those requirements.
“We’re seeing a shift in where people want to live, we’re seeing a shift in how people operate in their daily lives,” Greene said. “And I think we definitely need to think about the various needs of people as they continue to move toward this post-pandemic world.”
The report notes that time spent at home across the region has declined significantly since March 2020, though still remains well above pre-pandemic levels. Sly said he expects the rate to stay stable for the foreseeable future, adding that access to broadband internet will be a key to meeting the new needs of a more home-based workforce.
“We’re going to have to get used to thinking about this as a persistent feature of certain local markets, but I certainly don’t see it as a temporary one,” he said.