According to Redfin, U.S. home-sale prices increased 5.4% year over year in October to a median of $313,200. The increase was the largest since July 2018, although current strength may be overstated given the weakening housing market a year ago.
“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.”
Gains in the nationwide median home price continue to be driven by the affordable metro areas. For the fourth month in a row, the 10 metro areas with the biggest gains all had median sale prices below the national median, led in October by Camden, NJ (median price $197,000, up 13.9%), Jacksonville, FL ($243,179, +13.1%) and Greensboro, NC ($178,500, +10.5%).
In the Washington D.C. metro area, where Amazon announced its HQ2 expansion a year ago, the median home price rose 5.1% from October 2018 to $410,000–a larger year-over-year increase than San Francisco, Seattle, Los Angeles, Boston, New York and most other expensive metro areas across the nation.
Just one of the 85 largest metro areas Redfin tracks saw a year-over-year decline in the median sale price: San Jose, where home prices fell 7.2%. In San Jose, prices were still rising 9.9% a year ago, and home prices didn’t begin to significantly soften until December.
Home sales edged up 1.1% year over year in October, the third consecutive month of increases, and were down slightly from September on a seasonally-adjusted basis.
The seven markets with the biggest increases in home sales were all metro areas in the south with median home prices below the national median, led by Virginia Beach, VA (+19.6%), Greensboro, NC (+17.3%) and Greenville, SC (+16.3%).
The supply of homes for sale fell 9.1% year over year, the biggest decline since April 2017 and the fourth month in a row of declines. There were fewer homes for sale last month than in any October since 2013. Just 12 of the 85 largest metros tracked by Redfin posted a year-over-year increase in inventory.
Compared to a year ago, the biggest declines in the number of homes for sale were in Salt Lake City, UT (-44.6%), Albuquerque, NM (-43.4%) and Tacoma, WA (-32.9%), which are all among the more affordable metro areas in the West.
Home prices usually rise in response to either an increase in home sales (demand) or a decrease in the number of homes for sale (supply). When demand increases at the same time supply decreases, prices usually rise rapidly. October did not see much of an increase in home sales, but it did see a drop in the number of people listing their homes for sale and a drop in overall supply, so it’s likely that the strengthening prices were the result of fewer homes for sale instead.
The typical home that sold in October went under contract in 44 days, the same as a year ago. Similarly, the share of homes sold above list price basically flattened out year over year, coming in at 21.3% in October compared to 21.5% a year earlier.