The drivers behind the rise in home prices during the pandemic have been cited nauseatingly: low inventory, increased demand for more open-space housing, mobility enhanced by remote work.

But another factor is being reconsidered: pandemic-related fraud.

new research Fraudulent Paycheck Protection Program Loans Linked to Rising Home Prices in Some Markets, UT Austin Study Finds According to CNBC report. The paper notes that certain geographic locations have more fraud incidents and a higher potential for knock-on effects.

The researchers found that in ZIP codes with “higher suspicious loans per capita,” price increases were 5.7 percent higher than in other ZIP codes with lower amounts of fraud within the same county.

The findings hold true when land prices, previous house price trends, remote work access, population density, immigration and distance from the CBD are taken into account.

“This effect is large relative to other proposed factors explaining house price growth during the COVID-19 pandemic,” the authors write.

Kruger said those committing fraud created “potential distortions and spillover effects that are affecting others in the community.” Individuals who took out fraudulent loans were more likely to buy a property, the study found.

Home prices overall rose 24% from November 2019 to November 2021, according to the Federal Reserve Bank of San Francisco. Prices have shown signs of normalizing in recent months as mortgage rates soared, which were historically low in the early months of the pandemic, although low inventories have kept prices relatively high .

Between April 2020 and May 2021, the Pandemic Relief Package disbursed $793 billion. Previous research showed $117.3 in “doubtful loans” made through the program, which is designed to help small businesses stay afloat and maintain pre-pandemic employment levels. billion.

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