The seasonally adjusted house price index (HPI-SA) for Puerto Rico reached a score of 188.3 in the second quarter of 2021. This means that house prices are 88.3% higher in the island when compared to 1995, the base year of the index. When compared to the second quarter of 2020, the HPI-SA increased by 25.2 points or 15.4%. However, growth has slowed down recently, when compared to the first quarter of 2021 the HPI-SA increased by 1.7 points or 0.9%.
The significant increase in house prices when compared to the second quarter of 2020 could be a byproduct of the COVID-19 pandemic which brought historically low interest rates and remote work opportunities. Coupled together, these factors gave Puerto Ricans working abroad a unique opportunity to move back to the island and purchase a home. The fact that when compared to the first quarter of 2020 –when the pandemic started—the HPI-SA has increased by 38.34 points or 25.5% should serve as further evidence of this.
Overall, house prices have been increasing steadily over the last few years and should continue to outperform previous years despite the recent slowdown. The fact that the value of all the houses sold in June 2021 is 27% higher when compared to June 2020 should serve as proof of how much active the real estate market has been recently when compared to previous years.