- Home sale prices up +10% y/y to another all-time high of $314,000, according to Redfin
- 46% of homes had accepted offer within first 2 weeks
- Pending home sales +13% y/y
- Active inventory of for-sale homes down -28% and new listings flat y/y
As of the four weeks ending August 9, the housing market has been unseasonably hot. Buyer demand has pushed the median price of homes that sold during this period of time to $314,000, an increase of _3.5% m/m and +10% y/y, the largest year-to-year increase in more than six years.
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Compared to the same period last year when 33% of for-sale homes found a buyer within two weeks, this year 46% of for-sale homes found buyers within two weeks. This is the highest level of days on market (DOM) since at least 2012 when Redfin began tracking this specific data point.
According to Darlene Schror, a Redfin listing agent in New Jersey, “There’s not an area that isn’t hot right now because of a lack of homes for sale. Buyers today have a whole new set of preferences, such as being far away from neighbors and having space for a proper office, on top of all the usual criteria like highly rates schools.”
Homes are selling closer than ever to their list price with the average sale-to-list price ratio now hitting a new record high of 99.1%.
The seasonally adjusted Redfin Homebuyer Demand Index increased +31% from pre-pandemic levels in January and February of this year. Pending sales were up +13% compared to one-year prior and have essentially plateaued since their early July peak.
Active home supply during the four weeks ending August 9 was down -28% while the number of new listings was basically flat y/y. However, buyers may get some relief to this inventory crunch due to the new 0.5% fee added to mortgage refinances beginning on September 1. Since this fee only applies to refinances, some owners may want to utilize low rates to sell their existing home and buy another.
As hope fades for a second stimulus package to provide relief aid to jobless workers negatively impacted by the COVID pandemic, there are increasingly challenging risks to the US economy and the housing market. If and/or when the economy worsens and mortgage forbearance expires, a tsunami of homes could hit the market at the same time homebuyer demand drops.
We’ll see soon enough.
Thanks to Redfin.