In August, the nation’s home-sale prices rose 2.7% from 2018 levels, coming in at a median of $312,200, according to a report from Redfin.
August’s growth, which is modest at best, is right on trend as America’s home prices have been growing between 1% and 3% year over year since September 2018, according to the company.
“Although home-price gains remained relatively modest in August, supply and demand are now heading back toward sellers’ favor,” Redfin Chief Economist Daryl Fairweather said. “Home sales are accelerating as buyers eat into a diminishing number of homes for sale.”
While these trends are to be expected given that mortgage rates have been declining since late last year, global economic uncertainty and talk of a looming recession in the U.S. are staving off many aspects of hot seller’s market, Fairweather said.
According to Redfin’s report, home sales spiked 10.8% from last year, marking the largest annual increase since 2018. However, the supply of homes for sale fell 5.7% year over year, representing the biggest decline since April 2018.
“Just 20 of the 85 largest metros tracked by Redfin saw an increase in the number of homes for sale compared to a year earlier,” Redfin stated. “Housing inventory is falling even faster than we expected it to, thanks to a dearth of new listings, which fell 3.7% year over year in August, the largest decline on record since Redfin began recording this data in 2012.”
During August, the biggest declines in the number of homes for sale were in relatively affordable markets, including Tacoma, Washington; Salt Lake City; and Tulsa, Oklahoma. In these housing markets, inventory declined 26.8%, 26.1% and 24.4%, respectively.
The three housing markets with the biggest increases in the number of homes for sale were all in housing markets with home prices well above the national median, including San Jose, California; Oxnard, California and Honolulu. In these housing markets, inventory increased 12.5%, 11.5% and 11.4%, respectively.
“It’s important to remember that in August 2018, prices, sales and inventory were just beginning to indicate the onset of a cooling housing market,” Redfin Economist Taylor Marr said. “With that in mind, last month’s year-over-year sales increase and inventory decrease are only slightly exaggerated.”
“The fact that our seasonally adjusted measure of sales increased 4.9% from July to August as new listings and overall inventory declined tells us that supply is constricting and demand is growing meaningfully, signs that the market is heating up as we head into Fall,” Marr continued. “If not for recession fears, price and sales growth would likely be even stronger given this summer’s record-low mortgage rates.”