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%).
Advertisement
Related Stories
Sales
What the NAR Commissions Settlement Means for Home Builders
The legal settlement will improve transparency during the home sales process, mitigate predatory practices, and help preserve profitability for home builders
New-Home Sales
Mortgage Rates Are Up but New-Home Sales Still Solid in March
Lack of existing home inventory drove a rise in new-home sales, despite higher interest rates in March
Sustainability
Mention of Eco-Friendly Home Features Is on the Rise in Sales Listings
Home listing descriptions using eco-friendly terms have been rising over the past five years in line with growing consumer interest in the environment and energy efficiency