Buyers, powered by record-low mortgage rates and untethered by the pandemic, continue to outnumber sellers, resulting in intense competition and rising prices
The national median home price rose 2.8% year over year to an all-time high of $311,300 in June, according to a new report from Redfin , the technology-powered real estate brokerage. Home prices typically peak in June each year before trending down slightly through January, but given the pent-up demand that remains following the spring shutdowns, this year has been anything but typical so far, and it’s possible prices may continue to rise further before 2020 is over.
Median prices increased in all but four of the 85 largest metro areas Redfin tracks. The only areas where prices fell were Lake County, IL (-1.9%), New York (-1.9%), Baton Rouge (-1.8%) and Honolulu (-1.2%). Fort Lauderdale (+11.1%), Bridgeport, CT (+11.0%) and Fresno, CA (+10.8%) saw the largest year-over-year increases.
The housing market continued to rebound from the early-spring coronavirus shutdowns, with pending sales up 5.4% year over year, the first increase since February. However, new listings struggled to keep up, falling 11.6%—the fourth month in a row of double-digit declines. As a result, the balance of supply and demand remains strongly tilted in sellers’ favor.
In the month of June, home sales fell 14.8% from a year ago on a seasonally-adjusted basis, a sharp improvement from the 29.8% drop seen in May, but still the third-biggest drop on record going back to 2012 when this data set begins.
Home sales increased in June from a year earlier in 23 of the 85 largest metro areas. This is the first time since April that any of the large metro areas experienced year-over-year gains in home sales. The largest gains in sales were concentrated in Texas, Oklahoma and Louisiana, led by Baton Rouge (+23.3%), Tulsa (+15.5%) and Oklahoma City (+14.2%). There are still plenty of markets where sales are falling though, with the most extreme declines coming in Pennsylvania and New York, led by Allentown, PA (-47.3%), Montgomery County, PA (-46.7%) and Philadelphia (-42.1%).
Active listings—the count of all homes that were for sale at any time during the month—fell 20.7% year over year in June, similar to the record declines seen in April and May. This is the 10th-straight month of declines.
San Francisco was the only one of the 85 largest metros tracked by Redfin that posted a year-over-year increase in the count of seasonally-adjusted active listings of homes for sale. Active listings were up 23.8% there.
Compared to a year ago, the biggest declines in active housing supply in May were in Allentown, PA (-53.3%), Tulsa (-53.0%) and Kansas City, MO (-51.6%).
The number of homes for sale remains so far below last year’s level largely because new listings are still down 11.6%, which is much better than the all-time low of -40.2% seen in April, but simply not keeping up with the rate that homes are going off the market as pending sales. Even though home prices are hitting new highs, there are just not enough homeowners willing to sell their homes to balance current homebuying demand.
Other measures of competition in the market such as time on market and the share of homes sold above list price continue to paint a picture of a market tilted strongly in sellers’ favor as bidding wars continued unabated in June.