Home Prices Up 14%, But Price Growth May Wane Soon

Rhea-AI Summary

The median home sale price rose 14% year over year to $319,769, marking the highest level recorded, according to a Redfin report. This increase was the most significant since August 2013. Over the past four-week period ending September 27, home prices grew 6.5%. Key highlights include a 30% rise in pending home sales and a 12.8% increase in median asking prices of new listings. However, active listings dropped by 28% year over year, reaching an all-time low, which indicates tight supply. Daryl Fairweather, Redfin's chief economist, noted early signs of a potential plateau in price growth.

Positive

• 14% year-over-year increase in median home sale price to $319,769.
• Pending home sales climbed 30% year over year.
• New listings of homes for sale increased by 5% from last year.
• Median asking price of new listings up 12.8% from a year earlier.
• Average sale-to-list price ratio reached an all-time high of 99.4%.

Negative

• Active listings fell 28% year-over-year to an all-time low.
• Growth rate of asking prices declining since August.
• Mortgage applications decreased by 2% week over week.

SEATTLE, Oct. 5, 2020 /PRNewswire/ -- (NASDAQ: RDFN) — The median home sale price increased 14% year over year to $319,769—the highest on record, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. The 14% jump was the largest since August 2013. Since the four-week period ending July 5, home prices have increased 6.5%. Over that same period in 2018 and 2019, prices declined an average of 4.2%

Below are other key housing market takeaways for 434 U.S. metro areas during the 4-week period ending September 27.

• The median asking price of new listings was up 12.8% from a year earlier. This growth rate has been declining since the four-week period ending August 30, when it peaked at 15.7%.
• Pending home sales climbed 30% year over year.
• New listings of homes for sale were up 5% from a year earlier. Year-over-year growth in new listings have been above 5% since the four-week period ending August 16.
• Active listings (the number of homes listed for sale at any point during the period) fell 28% from 2019 to a new all-time low. The rate of year-over-year supply declines has remained consistent at this level for the past few months.
• 45.8% of homes that went under contract had an accepted offer within the first two weeks on the market. This has also held relatively steady for the last 17 weeks.
• The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, rose to 99.4%—an all-time high and 1.2 percentage points higher than a year earlier.
• For the week ending September 27, the seasonally adjusted Redfin Homebuyer Demand Index was up 34.8% from pre-pandemic levels in January and February.
• Mortgage applications decreased 2% week over week during the week ending September 25. For the week ending October 1, 30-year mortgage rates fell to 2.88%. Rates have been below 3% since late July.

"The question on everyone's mind is 'how fast can prices keep rising?'," said Redfin chief economist Daryl Fairweather. "Although the housing market is still red-hot, there are some early signs we may be nearing peak price growth. Sellers' asking prices are still up significantly from last year, but by a lower rate than they were growing during the summer. Mortgage applications are also beginning to wane, and more new listings are coming onto the market. This is likely to be as good as it gets for home sellers, who definitely have had it very good for a very long time."

Lack of strong growth in new listings is likely a direct result of the ongoing pandemic. In a recent survey of over 1,400 homebuyers and sellers, 20% of respondents said that now is a bad time to sell a home, up from just 9% in the first quarter of the year. In the same survey 38% of home sellers said that they have health or safety concerns due to the coronavirus pandemic, compared to just 8% of homebuyers who cited coronavirus as a concern.

To view the full report, including charts and methodology, please visit: https://www.redfin.com/blog/hot-us-real-estate-market-sept-27/

About Redfin
Redfin (www.redfin.com) is a technology-powered residential real estate company, redefining real estate in the consumer's favor in a commission-driven industry. We do this by integrating every step of the home buying and selling process and pairing our own agents with our own technology, creating a service that is faster, better and costs less. We offer brokerage, iBuying, mortgage, and title services, and we also run the country's #1 real estate brokerage search site, offering a host of online tools to consumers, including the Redfin Estimate. We represent people buying and selling homes in over 90 markets in the United States and Canada. Since our launch in 2006, we have saved our customers over $800 million and we've helped them buy or sell more than 235,000 homes worth more than $115 billion.

For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email press@redfin.com. To view Redfin's press center, click here.

View original content to download multimedia:http://www.prnewswire.com/news-releases/home-prices-up-14-but-price-growth-may-wane-soon-301145819.html

SOURCE Redfin

FAQ

What was the median home sale price reported by Redfin on October 5, 2020?

The median home sale price increased 14% year over year to $319,769.

How much did pending home sales increase according to the latest Redfin report?

Pending home sales climbed 30% year over year.

What trends did Redfin identify regarding new listings in the housing market?

New listings of homes for sale were up 5% from a year earlier.

What significant decline did Redfin report regarding active listings?

Active listings fell by 28% year over year, reaching an all-time low.

How did the average sale-to-list price ratio change according to Redfin?

The average sale-to-list price ratio rose to an all-time high of 99.4%.