The median home sale price climbed 11% year over year for the week ending July 26 to a record-high $315,000, according to the latest market report from Redfin.
The company says this was the largest increase in sale prices recorded since early 2014.
The price growth is a result of strong homebuyer demand, which is 27% higher than it was in January and February before the pandemic took hold, according to Redfin’s seasonally-adjusted Homebuyer Demand Index. Homebuyers are bidding up prices as they compete for a limited number of homes for sale. In the four weeks ending July 26, new listings were down 0.7% year-over-year, and active inventory of homes for sale was down 30%. The median sale-to-list price ratio rose to 99.0%: the highest level in at least six years.
Sellers continue to reach high with their prices; the median asking price of homes for sale in the last four weeks was up 14% from a year earlier. Even as list prices turn in double-digit growth from 2019, buyers are still paying up.
Pending sales were up 12% year over year in the four weeks ending July 26. While the year-over-year comparisons of home-buying demand have only gotten stronger, there is some evidence pending sales peaked in early July. Pending sales have slowed very slightly week-over-week for the past three weeks and are now about 2% lower than they were for the week ending July 5. That’s less of a dip than the typical seasonal slowdown between the first week of July to the last.
And although the housing market has so far been one of the most resilient parts of the U.S. economy, that strength is now facing a test as enhanced unemployment benefits passed as part of the CARES Act expired at the end of July, and there is no current agreement on whether or how to extend them.
“The economic pain of the pandemic has so far mostly been borne by those with lower incomes who were not as likely to be participating in the for-sale housing market,” says Redfin chief economist Daryl Fairweather.
“However, the expanded unemployment benefits being given to these workers has helped to keep the overall economy on stronger footing during a very uncertain time,” he adds. “One example of this is that the money has helped boost retail sales back to pre-pandemic levels. Without as much assistance to the millions of Americans who have lost their jobs during this recession, the impact could ripple outward and begin to affect sectors such as housing.”
To read the full report, click here.