Housing Demand Pushes Asking Prices Up 13%

Home sellers have been setting higher prices, but buyers seem to have no issue with it. Housing supply was down 28% in the four-week period ending July 12, according to Redfin, and pending home sales were up 7% year over year. Although final prices for homes sold increased by 6% year over year, and homes actively listed during the four weeks had a price increase of 13%, buyers have not been scared away. This may be a result of record-low mortgage rates. Redfin also points out that prices are going up during a time most typical for them to head south.

The U.S. housing market was unseasonably strong during the four-week period ending July 12. Listing prices were up 13% year over year to an all-time high of $328,500. Closed sale prices, which lag listing prices, were also up 6%. Home prices are turning in monthly gains at a time of year when prices normally start heading down because people shift their focus from buying and selling homes to vacations and preparing for the start of school.

Buyers’ offers are coming up to meet sellers’ rising price expectations. Sale-to-list price ratios, which measure the difference between the final sale price and the asking price, are also climbing, to an average 98.8%, up 0.2 percentage points from the same period in 2019. And for the one-week period ending July 12, the ratio hit an all-time high of 99.0%. During the same one-week period, the share of active listings with a price drop hit an all-time low of 34.4%.

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