Redfin's chief economist says the demand for a certain kind of home is behind the high growth rate
Home prices reached new heights in September, according to a new report from Redfin.
According to the report, the median home sale price in the US during the four-week period ending Oct. 4 increased by 15% year-over-year to $320,625 – the highest on record since September 2005.
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The report also found that, since the four-week period ending July 5, home prices have increased 6.8%. For context, prices declined an average of 4.4%. over that same period in 2018 and 2019.
Additionally, the average sale-to-list price ratio, which measures how close homes are selling to their asking prices, rose to 99.4% – an all-time high and 1.2 percentage points higher than a year earlier.
According to Daryl Fairweather, chief economist at Redfin, large, expensive, luxury homes are “taking up a bigger share of the homes that are selling, which is driving a high growth rate for the median sale price.”
“Remote work is increasing demand from affluent people, while middle-income people are more often expected to do their jobs in person, and many have been affected by furloughs and shutdowns,” Fairweather said.
“Sellers that are just getting into the market are seeing they can set their asking price a little higher than what they may have expected because inventory is so low and the buyer pool is still growing,” said Jim Seifert, a real estate agent at Redfin in San Antonio. “Homebuying demand is still really strong, which has really pushed multiple offers to a whole new level. You're not going to see prices go down right now.”
