Prices of homes for sale soared due to massive drop in housing supply
US home-sale prices jumped to their highest level since July 2018, giving sellers an edge in the market for moderately priced homes.
The prices of homes for sale in the United States rose 5.4% year over year in October to a median of $313,200, according to a report from Redfin.
Sales of homes inched up 1.1% annually, marking the third consecutive month of increases, but were down from September on a seasonally-adjusted basis.
There were fewer homes for sale last month than in any October since 2013. The housing supply shrank 9.1% year over year, the biggest decline since April 2017. Just 12 of 85 metros reported an annual increase in inventory.
"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."
Of the 85 largest metro areas, only San Jose reported a year-over-year drop in the median sale price, down 7.2% from 9.9% a year ago.
Affordable metro areas continued to drive the increases in median home price growth, according to Redfin. For the fourth straight month, the 10 metro areas with the largest gains all had median sale prices below the national median. Camden, NJ led the top 10 with a median price of $197,000, up 13.9%, followed by Jacksonville, Fla ($243,179, +13.1%), and Greensboro, NC ($178,500, +10.5%).
Meanwhile, price growth in expensive metro areas has been slower. The median home price in Washington, D.C., where Amazon announced its HQ2 expansion last year, climbed 5.1% annually to $410,000.
