Redfin’s Homebuyer Demand Index hit an all-time high since at least 2017 as the number of listed homes remains seasonally elevated compared to past years.
The report shows the market speeding up, with an increasing number of homes selling in two weeks or less and demand increasing even as listings trend down.
“The economy is recovering strongly and mortgage rates are still near all-time lows. Those two forces combined have caused homebuying demand to hit a record high,” said Redfin Chief Economist Daryl Fairweather.
For homes sold in the four-week period ending November 14, the median sale price rose 13% year-over-year (YOY) to $357,881, up 30% from 2019 and 2.1% from October. Asking prices were also up 13% YOY, and pending home sales were up 7% YOY and 51% from 2019.
New listings fell 3% YOY but were up 11% from 2019. Looking at the last 6 weeks, however, showed a much larger drop: 12% from the same period in 2020. That drop is slower than in previous years, though, as listings fell 18% over the same period in 2019.
There is some evidence that the hot market craze is slowing down a little. Homes that sold were on the market for a median of 24 days, more than a week longer than the all-time low of 16 days seen in late June and July.
Zillow’s latest market report claims the market is showing small signs of seasonal cooling, saying “October witnessed normal fall trends of decelerating growth for rents, declining list prices, longer times on market for listings and more homes receiving price cuts before sale.”
“Homebuyers shopping this fall shouldn’t expect the same frenzied demand that triggered bidding wars on listings this spring and summer,” said Zillow senior economist Jeff Tucker. “The normal seasonal slowdown of autumn has returned, when many families are busy with back-to-school activities and planning for the holidays.”
But even as time on market increases, 45% of homes that went under contract had an accepted offer within the first two weeks being listed, up 5% YOY.
“People who tried to buy a home in the spring are coming back for round two, only to find the market is still quite difficult because of a lack of homes for sale,” Fairweather noted.
“A lot of homebuyers wish they had bought last year, now that it’s not just homes that are more expensive, but also gas, groceries, and dining out. Many buyers today are limited to move-in-ready homes because it is so difficult and expensive to purchase new appliances or find contractors to make improvements.”
Inflation is currently at a 30-year high, with consumer prices jumping 6.2% YOY. Though the Fed previously insisted that high inflation is a temporary problem, they have since walked back those assurances.
Economists at Goldman Sachs said last week that inflation is “likely to get worse before it gets better,” and could stay high into next year.