Late-July Home Prices Soar 11% from a Year Ago to a Record High

Rhea-AI Summary

The median home sale price increased by 11% year-over-year to a record high of $315,000 for the week ending July 26, 2020, as reported by Redfin. This marks the largest price rise since early 2014. Demand from homebuyers is 27% higher compared to pre-pandemic levels, while active listings have decreased by 30%. Pending sales rose 12% year-over-year, though there are signs of a slight seasonal slowdown. The expiration of enhanced unemployment benefits could impact housing demand going forward.

Positive

• Median home sale price reached a record high of $315,000, a significant increase of 11% year-over-year.
• Homebuyer demand is up 27% compared to January and February, driving prices higher.
• Pending home sales increased by 12% year-over-year.

Negative

• The expiration of enhanced unemployment benefits could negatively impact housing demand.
• Active inventory of homes for sale is down by 30%, indicating a supply shortage.

SEATTLE, Aug. 3, 2020 /PRNewswire/ -- (NASDAQ: RDFN) — 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 (www.redfin.com), the technology-powered real estate brokerage. This was the largest increase in sale prices recorded since early 2014.

The strong 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.

"One of the first things I have to do with many of my buyers here in Houston is educate them on the reality that most houses are selling for more than asking," explained Redfin agent Melanie Miller. "You can't wait around for a price drop. Rather, homes that are priced right are receiving offers at or above full price within three days of being listed, so serious buyers need to be ready to act quickly."

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.

"The shortage of homes for sale makes people think 'maybe I should wait until things get cooler', but unless we start to see a huge surge of new listings, things aren't going to cool down much," said Salt Lake City Redfin agent Campbell Dosch. "Even new construction is selling out faster than it is being built. The shortage has extended into rentals too. A lot of people are living with family and friends now because it's too hard to enter the market."

Pending Home Sales Still Turning in Strong Gains
Pending sales were up 12% year over year in the four weeks ending July 26. While the year-over-year comparisons of homebuying demand have only gotten stronger, there's 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.

Expiration of Unemployment Benefits Could Impact Housing
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," said 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. 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 view the full report, including charts, outlook and methodology, please visit: https://www.redfin.com/blog/home-price-increase-hits-new-high

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/late-july-home-prices-soar-11-from-a-year-ago-to-a-record-high-301104987.html

SOURCE Redfin

FAQ

What was the median home sale price reported by Redfin for late July 2020?

The median home sale price for the week ending July 26, 2020, was reported at a record high of $315,000.

How much has homebuyer demand increased according to Redfin's report?

Homebuyer demand has increased by 27% compared to January and February before the pandemic.

What percentage did pending home sales rise year-over-year in late July 2020?

Pending home sales rose by 12% year-over-year in the four weeks ending July 26, 2020.

What risk does the expiration of unemployment benefits pose to the housing market?

The expiration of enhanced unemployment benefits could adversely affect housing demand by reducing consumer purchasing power.

What is the impact of low housing inventory on the real estate market?

The active inventory of homes for sale has decreased by 30%, indicating a significant supply shortage that drives prices up.