The national median home price in September rose 14.4 percent year-over-year to $333,900, the biggest annual increase of any month since 2012, according to a new report from Redfin.
Redfin attributed the price appreciation to record-low mortgage rates, a historic shortage of housing supply and a pandemic-driven demand for spacious homes.
“Twenty-twenty will be known for a lot of things and a record-breaking year for real estate will certainly be one of its more unexpected legacies,” Redfin Chief Economist Daryl Fairweather said in a release. “Demand typically abates in late summer and early fall, but seasonal patterns don’t stand a chance against the other factors motivating homebuyers this year. Homebuyers are seeking spacious homes in areas outside big cities to accommodate homeschooling and remote work. That plus low mortgage rates and record-low inventory are fueling historically high price growth and the fastest market in recent history.”
Redfin said median prices in September increased year-over-year in all the 87 largest metro areas it tracks. The largest increases happened in Bridgeport, Conn. (+33.1 percent); Memphis (+29.7 percent); and Philadelphia (+23.6 percent). The smallest year-over-year increases were in Honolulu (5.3 percent); Milwaukee (+6.1 percent); and Baton Rouge, La. (+6.2 percent).
“It’s a great time to be a seller, but tough to be a buyer,” San Diego Redfin agent Charles Wheeler said. “People walk into a home and think ‘wow, this is amazing,’ but 100 other people are thinking the same thing. People are listing their homes and within three days they're gone.”
“Low rates are the main motivator for buyers, and they’re also seeing that the pandemic isn’t really slowing down and they want to move into a bigger home with a big backyard,” Wheeler added. “Because of the pandemic, people who have been lucky enough to keep their jobs are saving more money than usual because they’re not going on vacations or going out to eat. They’ve been able to save more toward a down payment and they have the means to buy a home to make their socially distant lifestyles more comfortable.”