Homes for sale in rural areas across the nation plunged 44.4 percent year over year during the four weeks ending January 21, driving an all-time low in active listings, according to a new report from Redfin.
Homes for sale in suburban areas also fell significantly, by 38.4 percent, compared to the same period the year before. The brokerage said the substantial drop in supply of homes for sale in both of these areas, but particularly the rural decline, significantly contributed to the overall shortage of homes for sale, which was down 34 percent year over year to a 4-week rolling average of 528,903 weekly active listings.
By comparison, urban areas only saw a 16.9 percent year over year decline in homes for sale, a gain from the 21.5 percent drop in active listings those types of neighborhoods saw during May and June.
“The scarcity of rural and suburban homes for sale is driving the overall housing supply shortage,” Redfin Chief Economist Daryl Fairweather said in a statement. “Many homeowners are staying put, and homes in those neighborhoods are snapped up as soon as they’re listed for sale. Homes in rural and suburban areas remain popular as the pandemic and remote work continue to motivate buyers to prioritize indoor and outdoor space over commute times and urban amenities.”
For now, Fairweather added, urban homebuyers may have an easier time searching for a home, but if developers continue to favor projects outside of city centers as a result of the current swing towards rural and suburban areas, urban buyers may face greater challenges searching for homes in the near future.
“Developers are focusing on creating new homes outside city centers, where there’s more room for sprawl, but that could mean the shortage in urban areas will worsen over time, with fewer homes being built,” Fairweather said.
Meanwhile, surging demand for homes has not helped with the inventory shortage. During the four weeks ending January 21, pending sales in rural areas were up 43.5 percent, while in suburban areas they were up 35.1 percent, as well as 32.4 percent in urban areas. New listings were also down by 10 percent year over year, the largest drop in seven months.
Suburban homes spent the fewest days on market during this period at 30 days, while homes in rural areas went under contract in 39 days and homes in urban areas went under contract in 36 days. Those figures represent sales 22 days faster, 29 days faster and 14 days faster than a year ago, respectively.
Prices also saw big gains during this period with the median home sale price in rural areas up 16 percent year over year to $290,592, though still not as significant a gain as the 17.7 percent peak annual increase seen in November. Suburban home prices increased 14.5 percent annual to a median of $330,230 and urban home prices rose 15.2 percent to $288,000. Both gains were the largest annual increase in prices for these neighborhood types since 2017.
Total home sales were also up across the board, reflecting buyer optimism as vaccine distribution has rolled out across the country. Sales were up 18.3 percent in rural areas, 23.5 percent in suburban areas and 21.6 percent in urban areas.