‘Astonishing’ price growth continues, demand slows
Median home prices hit a record high again in July, reports Redfin’s research team, hitting $ 385,600. This marks an annual increase of 20%, which doesn’t quite exceed the largest peak in the annual growth rate of 26% in May, but still higher than any point on record before April of this year.
July sees 12 consecutive months of double-digit price increases, which is significant because a year ago the housing market was already in a phase of strong growth, after a brief hiatus at the start of the pandemic. A year later, the Redfin team says it is still experiencing extremely strong growth, but the market is gradually becoming less competitive for buyers.
“Home prices are still skyrocketing at an astonishing rate,” said Daryl Fairweather, chief economist at Redfin. “Now that we are one year away from the post-containment rebound, we can no longer explain the huge price growth by highlighting the initial impacts of the pandemic on the housing market. Although this trend continues to fuel a crisis Affordability is already serious, the market is becoming a little less competitive for homebuyers, and demand has slowed enough that homes are not off the market as quickly or at as high a price as in the spring. Mortgage rates remain about as low as they were in the spring. I’ve ever been, so buyers who lose out in a bidding war don’t have to worry about missing their window to buy. As more homes go on sale, it may be worth the wait for the right home at the right price. “
Median selling prices increased year-over-year in the report’s 85 largest metropolitan areas. The largest price increase was recorded in Austin, Texas, where prices climbed 39%.
The smallest price increases were recorded in New Orleans, where prices rose another 5%.
Seasonally adjusted home sales in July were down 1% from the previous year and down 0.2% from June. Compared with July 2020, home sales fell in 55 of the 85 subways. The largest sales declines were seen in Richmond, Va., Down 52%. The biggest gains were in places where sales were still somewhat depressed in July 2020, so New York City, up 79% and Nassau County, New York, up 53%.
The seasonally adjusted number of all homes that were for sale at any time during the month fell 25% year over year to their lowest level on record. Registrations only increased at two of the 85 subways: Milwaukee and Columbus.
The typical house sold in July went under contract in 15 days, less than half the time a year earlier, when houses sold in 35 days on average, but up a day from June.
While it creates affordability issues for first-time homebuyers, for existing homeowners, the “astonishing” rate of growth in home prices is a primary condition that differentiates pandemic-related strains on the market. US economy from those of the Great Recession, experts said.
Thirteen years ago, more borrowers than not were underwater on their mortgages. Today, home prices have led to unprecedented amounts of equity, so borrowers who are currently in arrears on their mortgage payments can dip into their equity and sell their home rather than losing it through foreclosure. Frank Martell of CoreLogic said when his company released its latest equity report. month.
“Homeowners’ net worth has more than doubled over the past decade and has become a crucial buffer for many people to overcome the challenges of the pandemic,” he said at the time. “This reduces the likelihood of a large number of troubled sales from owners coming out of forbearance later in the year.”
The full Redfin market report is available at Redfin.com.