As mortgage rates remain low, homebuyer demand has risen and that’s leading to fewer and fewer houses being on the market.
The supply of homes for sale fell 9.1% year over year in October, the biggest decline since April 2017 and the fourth month in a row of declines, according to a new report from Redfin.
And with supply on the decline, home sale prices are rising to meet the demand.
According to the report, home prices in the U.S. increased 5.4% year over year in October to a median of $313,200 across the 217 metros Redfin keeps track of.
These prices also rose 1.4% between September and October, a time of year when they usually flatten, Redfin said. This is the largest month over month increase in an October since at least 2012, showing abnormality in the market.
“Low mortgage rates are propping up homebuyer demand and juicing prices, said Redfin Chief Economist Daryl Fairweather. “However, home sales have been slow to grow since there are so few homes for sale and not many new listings hitting the market, especially affordable ones. The market is split: It’s a seller’s market for moderately priced homes, but a buyer’s market for pricier homes.”
On that note, home sales were up 1.1% year over year in October, the third consecutive month of increases, but were down slightly from September on a seasonally-adjusted basis.
Homes also aren’t spending a lot of time on the market before they are sold. The typical home that sold in October went under contract in 44 days, the same as in 2018.
The share of homes sold above list price flattened out year over year, at 21.3% in October compared to 21.5% in 2018.
For the fourth month in a row, the 10 metros with the biggest gains all had median sale prices below the national median, led in October by Camden, New Jersey, with median price $197,000, up 13.9%, and Greensboro, North Carolina with the median price at $178,500 and up 10.5%.
San Jose, California, meanwhile, is the only metro to see a price decline in October, at -7.2%.