Home prices keep rising, as affordability problems sprout in new areas

Median home prices have hit an all-time high, creating an undesirable impact on what here-to-fore were more affordable locales, according to Redfin.

"Home price growth this high is making the housing market especially difficult for first-time homebuyers right now," Redfin Chief Economist Daryl Fairweather said in a press release.

"Rising prices are just one more reason for people to leave expensive urban neighborhoods behind," Fairweather added, noting that those urban expats are pushing up the home prices in the relatively affordable areas.

"Price growth may slow in 2021, but even if it does, high prices are going to continue to make affordability a concern for buyers," she said.

For the four-week period ended Sept. 6, median home prices averaged $319,171, up 13% compared to the same period in 2019. It’s the largest year-over-year gain since October 2013.

The number of home sales in the 434 metropolitan areas studied by Redfin were up 28% year-over-year to an average of 59,636 units, the most since the four week period ended Aug. 2, 2015.

New listings were up 9% from one year ago to an average of 86,986 — the most in any four week period since Dec. 20, 2015. But the number of active listings overall during that time frame fell 28% from the year before. The year-over-year decline in housing supply has been at this same level for the past couple of months.

Just under half of the sellers whose homes went into contract during this time frame, 46.4%, had an accepted offer within the first two weeks after going on the market. That's the highest percentage of sellers doing so since at least 2012, when Redfin first began tracking this piece of data. Last year it was 31.8%.

At this time last year, there was little competition for the homes on the market, as only 10% of purchase offers had another bid to contend with.

The average sale-to-list price ratio, which measures how close homes are selling to their asking prices, rose to 99.3% — an all-time. It's a full percentage point higher than a year earlier, when it was 98.3%.

The seasonally adjusted Redfin Homebuyer Demand Index was up 21% for the week of Sept. 5, compared with pre-pandemic levels in January and February.