We’re in the middle of what’s typically a slower homebuying season, but the housing market isn’t losing steam yet. Home prices are seeing double-digit percentage increases year over year, and the supply of for-sale homes is at an all-time low.
More than half (55%) of homes listed for sale were under contract within two weeks of being on the market, according to the latest data from Redfin, a national real estate brokerage. This is the highest percentage reached in the near-decade that Redfin has tracked the data.
Home sales continue their rise
According to Redfin, pending home sales are up 30% year over year. This trend tracks slightly higher than the National Association of Realtors (NAR) Pending Home Sales Index, which reported a 21.4% increase in contract signings year over year.
"Buyers are incredibly hungry for listings, but unfortunately there isn’t much to choose from, and that scarcity is making buyers all the more frenzied," Daryl Fairweather, Redfin’s chief economist said in a statement. "As a result, the majority of the homes that hit the market are getting multiple offers right away."
The dwindling housing supply has intensified homebuyer demand and continues to drive up prices. The median home sale price has increased 15% year over year, jumping to $318,280.
Separately, the median price for existing homes is $309,800, according to NAR’s latest existing-home sales report. This is a 13% increase over the previous year.
Homes are selling extremely close to their asking price, Redfin said. The average sale-to-list price ratio has jumped 1.6 percentage points, to 99.3%.
For-sale listings take a dive
Active listings have dropped 35% year over year — an all-time low. Redfin defines active listings as the number of for-sale homes listed at any point during the four-week period being analyzed.
Similarly, new, for-sale listings fell 12% when compared with the same period during the previous year.
The downturn in listings underscores the sobering reality that there aren’t nearly enough homes on the market. There are 1.07 million housing units — a 1.9-month supply — available for sale, according to NAR December data. Housing inventory has dropped 23% year over year and is now at an all-time low.
"The inventory is there; it's lying in wait," Scott Petrich, a Seattle-based Redfin real estate agent, said in a statement. "Now that the end of the pandemic is in sight, people will gradually start listing homes for sale."
Methodology: Redfin’s report analyzed housing market data for more than 400 U.S. metropolitan areas. The analysis covers the four-week period ending Jan. 24, 2021.