July became another month of record breaking numbers for the housing industry as median home prices shot up to a new all-time high. Home prices grew 8.5% year over year, pushing the median price up to $349,000, according to Realtor.com. It may seem odd that the highest median home prices on record are in the middle of a pandemic and recession, but Realtor.com’s chief economist says it’s a result of the housing shortage. In a market currently most beneficial for sellers, there are still many homeowners reluctant to list. And low mortgage rates helped make homeownership more attainable for buyers.
"When the pandemic helped tip the U.S. economy into recession, most homeowners and home buyers braced for falling house prices," says realtor.com Chief Economist Danielle Hale. "That's what happened in the last recession. But that's not what we're seeing in today's market. We had a housing shortage already, and the pandemic has created conditions that have only worsened it."
The total inventory of homes on the market is about a third less—roughly 440,000 properties short—than what existed last summer. In some parts of the country, new home construction was delayed or paused in the spring in the beginning of the pandemic. Meanwhile, many sellers nervous about contracting COVID-19 from buyers touring their homes put off plans to list their residences or pulled them off the market. Many of those listings have yet to go back up.