As of August 2020, home sales across the country compared to the booming home-selling days of 2006. The four major regions of the U.S. experienced month-over-month and annual growth, according to the NAR (National Association of Realtors).
As the supply of homes continues to fall short of demand, home prices continue their climb. Existing homes for all housing types in August rose 11.4% compared to 2019, making the median price $310,600. NAR’s chief economist, Lawrence Yun, reported, “Housing demand is robust but supply is not, and this imbalance will inevitably harm affordability and hinder ownership opportunities. To assure broad gains in home ownership, more new homes need to be constructed.”
Because of lumber shortages caused by California wildfires, however, lumber prices are surging. The price increases are driving up costs of both multi-family and single-family homes. At the end of August, the National Association of Home Builders announced that softwood lumber prices were prompting home building cost increases of around $14,000 per home.
Below is a snapshot of the NAR’s latest report on the nation’s housing for the month of August.
Days on Market: 69% of homes sold were on the market less than a month. Total days on market was 22 days, down from 31 days in 2019.
Supply: Inventory of U.S. homes for sale at the end of August was 1.49 million, down 18.6% from 2019 (1.83 million). Unsold inventory would last three months if sold at the current rate of sales.
First-Time Buyers: Buyers jumping into home ownership for the first time accounted for 33% of August home sales, up from 31% in 2019.
Investors and Second-Home Buyers: This group of buyers makes up the biggest portion of cash sales. They accounted for 14% of home sales in August, equal to the prior year. Cash sales were down slightly (1%) from last year.
Distressed Sales: Foreclosures and short sales accounted for less than 1% of sales in August, down from 2% a year ago.
Median Home Prices by Region
Median home prices increased in all four U.S. regions in August. Percent of increase compared to August 2019 is included:
Northeast: $349,000, up 10.4%.
Midwest: $246,300, up 10.7%.
South: $269,200, up 12.3%.
West: $456,100, up 11.8%.
In the Greater Cincinnati area (for the week of Sept. 19, 2020), median list prices were up 18.4% compared to last year, total listings were down 48%, and houses were on the market nine days less than this time last year. Even as new listings come onto market, most sellers will go on to buy another home, adding buyers into the mix. And thousands of second homes and rentals that were previously vacant have been reoccupied by owners during the COVID-19 crisis, effectively removing them from the market.
Source: Data from Sept 22, 2020, NAR’s REALTOR® Magazine
Real Estate Term of the Week
Median Home Price: The midway point of all the houses/units sold at market price (or sold amount) over a set period (monthly, yearly, quarterly, etc.). If there were 101 houses sold during the month, the median house price would be the house price in the middle—the one that has 50 house prices above it and 50 house prices below it.