Home prices soared by 14.4 percent in September, the largest annual increase of any month since Redfin began tracking prices in 2012, according to a report released Monday by the real estate brokerage.
The increases are being driven by three converging factors, Redfin concludes: record-low mortgage rates, a historic housing supply shortage and a demand for bigger homes in pandemic times.
“2020 will be known for a lot of things and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” Redfin chief economist Daryl Fairweather said. “Demand typically abates in late summer and early fall, but seasonal patterns don’t stand a chance against the other factors motivating homebuyers this year. Homebuyers are seeking spacious homes in areas outside big cities to accommodate homeschooling and remote work. That plus low mortgage rates and record-low inventory are fueling historically high price growth and the fastest market in recent history.”
Median prices increased year over year in every single one of the 87 largest metro areas Redfin tracks, led by Bridgeport, Connecticut (up 33.1 percent) and Memphis (up 29.7 percent). Honolulu saw the smallest increase at 5.3 percent, followed by Milwaukee (6.1 percent and Baton Rouge (6.2 percent).
The report also found that:
- Home sales increased in September from a year earlier in all but two of the largest metro areas (Buffalo and Memphis).
- Active listings fell 22.8 percent year over year on a seasonally adjusted basis to their lowest level on record in September, the 13th straight month of declines.
Here is a look at the national market:
|Market Summary||September 2020||Month-Over-Month||Year-Over-Year|
|Median sale price||$333,900||1.7%||14.4%|
|Homes sold, seasonally adjusted||620,100||4.1%||17.6%|
|Pending sales, seasonally adjusted||601,600||7.3%||32.9%|
|New listings, seasonally adjusted||661,700||1.0%||5.9%|
|All Homes for sale, seasonally adjusted||1,655,900||-2.1%||-22.8%|
|Median days on market||29||-2||-12|
|Months of supply||1.6||-0.1||-1.5|
|Sold above list||33.9%||1.7 pts†||11.3 pts†|
|Median Off-Market Redfin Estimate||$322,700||2.5%||3.8%|
|Average Sale-to-list||99.4%||0.2 pts†||1.2 pts†|