iCrowd Newswire - Sep 22, 2020
The already difficult task of buying a home became even more challenging this week as home price growth hit a two-year high and natural disasters drove the number of homes for sale even lower, according to realtor.com’s® Weekly Housing Report for the week ending Sept. 12. Overall, the housing market remains strong but saw a slight tempering last week as wildfires and hurricanes prevented potential sellers across the West and South from listing their homes.
“Today’s home buyers face some daunting challenges. Home price growth just set a new high of 11% with no indication of a slowdown and there are nearly 40% fewer homes for sale than this time last year,” said Danielle Hale, chief economist for realtor.com.® “Inventory is so low that any disruption, such as this week’s wildfires and hurricanes, feels even more stifling for would-be home buyers. Although this year is anything but typical, we expect inventory to follow the usual seasonal pattern of tapering off in the next few weeks, but we don’t expect buyer demand to drop off as much as usual. Buyers hoping to take advantage of less competition during the housing off-season will likely be disappointed and could find it even more difficult to find a home.”
Wildfires, Hurricanes and the Labor Day holiday worsened declines in homes for sale
- The number of new listings hitting the market for the week ending Sept. 12 declined 17% compared to last year, as a result of the natural disasters and Labor Day holiday. There had been some improvement in new listings declines earlier this summer, such as the 11% yearly declines seen in late July and early August. But the combination of natural disasters scaring off sellers and one less work day (Labor Day holiday) resulted in overall fewer sellers putting homes on the market.
- The total number of homes available for sale is down 39% compared to this time last year. The lack of new listings hitting the market, paired with an incredible number of home buyers, has created a situation where there aren’t as many homes as there are buyers.
Strong demand drove home prices 11.1% higher than last year — a two-year record
- Buyer demand and lack of supply drove median listing prices up at the fastest rate in two years, 11.1% year-over-year, which is the 18th consecutive week of home price acceleration. Low mortgage rates have helped keep payments relatively affordable and prevented too many buyers from getting priced out.
Quick home sales are today’s new normal
- It currently takes 54 days to sell a home, which is 11 days faster than this time last year. Today’s fast-paced market is being fueled by limited inventory and fierce competition from other buyers. Those who want to close, know that they have to make a quick offer which is contributing to fast home sales.
Housing market remains strong but saw a slight weakening due to declines in inventory
- Realtor.com® tracks the overall strength of the housing market through its proprietary Housing Market Recovery Index, which compares real-time key indicators including trends in number of searches on realtor.com®, median listing prices, the number of newly listed homes, and the time it takes to sell to January 2020, prior to the pandemic.
- This week, the index was 107.4 points, 1.5 points weaker than last week, but 7.4 points stronger than it was pre-COVID. The weekly decline can be attributed to this week’s natural disasters, which weakened market health in the Western and Southern regions of the U.S. by 1.9 and 1.8 points, respectively.
Link to Index Commentary Blog Post: https://www.realtor.com/research/housing-market-recovery-index-trends-sep-12-data/
Methodology: The Weekly Housing Index leverages a weighted average of realtor.com® search traffic, median list prices, new listings, and median time on market and compares it to the January 2020 market trend, as a baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period. The higher a market’s index value, the higher its recovery and vice versa.
Cody Horvat, email@example.com