A recent Redfin report reviewed 2021, the record year for the housing market. In the past year, home-sale prices hit the highest median of all time, the number of homes for sale fell to an all-time low, and there was record demand for second homes.
“The ongoing pandemic, including its seismic effect on the U.S. economy and the way Americans live and work, has made 2021’s housing market anything but typical,” Redfin Chief Economist Daryl Fairweather said in a release. “Remote work, low mortgage rates, a shortage of building materials and wealth inequality that has allowed an influx of affluent Americans to buy vacation homes, to name just a few factors, have come together to create a historic year for real estate. Buyers paid more for homes, bought sooner than they planned, searched outside their hometowns or all of the above. This year’s frenzied housing market has been one for the books — but it may become more balanced in 2022.”
According to Redfin, the following records were set in 2021:
The typical U.S. home sold for nearly $400,000. The national median home-sale price hit $386,000 in June, an all-time high and up 24.4 percent year-over-year. Home prices have been growing by double digits all year, thanks to low inventory and high demand.
Home supply dropped to its lowest level in history. There were just 1.38 million homes for sale in June on a seasonally adjusted basis. That’s an all-time low and down 23 percent year-over-year. The housing-supply shortage is due to a combination of reasons, according to Redfin, including lack of new construction, surging demand from buyers, and homeowners taking advantage of low mortgage rates to refinance rather than sell.
The typical home sold in just 15 days. The typical home that sold in both June and July was on the market for just 15 days. That’s the lowest median days on market in history and down from 39 days in June 2020. The speed of the market is due partly to the supply crunch, which has led buyers to pounce on homes as soon as they’re listed for sale, often without even seeing them in person.
Over 60 percent of homes went off the market in two weeks. Nearly two in three (61.4 percent) homes that went under contract in March had an accepted offer within two weeks of hitting the market, an all-time high.
More than half of homes sold above list price. Of homes that sold in June, 56.5 percent went for above list price. That’s a record high and up 29.6 percentage points from a year earlier. The average home sold for 2.6 percent above list price in June, another record high.
Mortgage rates dropped to 2.65 percent. The average 30-year fixed mortgage rate hit 2.65 percent the week ending Jan. 7, 2021, the lowest of all time. Low mortgage rates are one reason for this year’s homebuying frenzy, which has ultimately resulted in the supply shortage and surging prices.
Investors purchased nearly 1 in 5 of all homes bought. Real estate investors bought 18.2 percent of homes that were purchased in the U.S. during the third quarter. That’s a record-high share, up from 11.2 percent a year earlier. In dollar terms, investors bought a record $63.6 billion worth of homes over that period, up from $35.7 billion a year earlier.
Demand for second homes nearly doubled from before the pandemic. Homebuyer demand for second homes was up 91 percent from pre-pandemic levels in January, marking record growth. Demand for vacation homes soared as remote work took hold in mid-2020, leaving many affluent white-collar workers with the ability to work from beach houses and ski chalets.
Nearly one-third looked to move to a different metro area. In another side effect of the surge in remote work, 31.5 percent of Redfin.com users looked to move to a different metro area in the first quarter of 2021, an all-time high and up from 26 percent from a year earlier.
The typical luxury home sold for 25 percent more than the year before. The median sale price luxury homes jumped 25.8 percent year-over-year to $1.025 million in the second quarter of 2021, marking record price growth. That’s compared with 16 percent year-over-year growth for mid-priced homes and 13.2 percent growth for affordable homes.