Housing Supply Falls to New Low While Prices Hit New High

For the third time in four months, the national median home price hit a new all-time high. In July, median home prices increased by 8.2% year over year, reaching $323,800. This price rate growth is on par with levels seen in 2016 and 2018, according to Redfin. The amount of active listings in July dropped by 21.8% year over year. Markets which experienced the highest year-over-year price increase were Birmingham, Ala., Bridgeport, Conn., and Fort Lauderdale, Fla. Home sales also increased in 67 of the 85 largest metro areas in July, but some states, such as New York, are seeing dramatic drops in home sales.

“Home sales made a whopping recovery in July,” said Redfin chief economist Daryl Fairweather. “It may seem like the Twilight Zone for the housing market to be performing better than ever while the economy is in the tank, but it goes to show that we are in truly unprecedented times. The housing market was incredibly robust going into the pandemic with household debt at its lowest level in 40 years. The less debt someone has, the less likely they are to be worried about affording a mortgage, which is as inexpensive as it’s ever been due to record-low interest rates, making a home purchase very appealing to people who are lucky enough to be securely employed.”

Home sales were up 4.9% in July from a year earlier on a seasonally-adjusted basis, a sharp improvement from the 13% drop in June, and the first year-over-year increase since the pandemic began in March.

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