Home-Sale Prices Pushed Up by Housing Shortage in December

January 17, 2020
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new house By LIGHTFIELD STUDIOS - Adobe Stock

At face value, December brought good news for builders: Houses are selling two days faster and going for much higher prices compared to last year. Home-sale prices rose nearly seven percent year-over year in December to an average of $312,500, resulting in a 33-month high in home-sales growth. But the higher price tags for homes come from a troubling source: the housing shortage. When homes are harder to find, their prices rise, and the supply dipped quite a bit, falling 15 percent year-over-year. Additionally, the number of new listings fell five percent, which is the steepest decline ever in listings since Redfin started tracking it in 2012. See where your city’s home prices and inventory stood in December in Redfin's analysis. 

U.S. home-sale prices increased 6.9% year over year in December to a median of $312,500 across the 217 metros Redfin tracks. Home prices were also up 1.1% month over month on a seasonally-adjusted basis, the largest increase since February 2018.

“Low mortgage rates and a strong economy fueled homebuyer demand in December, which boosted both home sales and prices,” said Redfin chief economist Daryl Fairweather. “Prices heated up in West Coast metros like Seattle and Los Angeles, which indicates the slowdown of 2019 has officially ended in these markets.”

Prices continued to increase the fastest in affordable metro areas in December. Among the 20 metro areas with the largest year-over-year price increases, 16 were below the national median, led in December by Memphis (median price $190,000, up 15.9%), Camden, NJ ($195,000, +14.7%) and Cincinnati ($187,000, +14.4%).

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