An abysmal lack of homes for sale is colliding with the spring buying market, creating mind-boggling bidding wars and, according to a new report, home prices that have literally never been higher.
The report comes from realtor.com and shows that the median U.S. home listing price in March hit $370,000. That’s up 15.6 percent compared to the same time last year, and is the highest number in all of realtor.com’s records, which go back to 2012.
Data from the U.S. Federal Housing Finance Agency (FHFA), further shows that even in the period preceding the housing bubble of 2007 and 2008 home prices didn’t reach the heights they’re current hitting.
According to realtor.com, prices in the 50 largest U.S. metro areas “grew by an average of 12.1 percent year-over-year with some markets seeing listing prices grow by nearly triple that amount.” The top three cities for price growth in March were Austin, Texas, which saw listing prices soar by nearly 40 percent; Buffalo, New York, where prices jumped by more than 28 percent; and Los Angeles, where prices are now almost 25 percent higher than they were a year ago.
The reason prices have climbed so high is probably apparent to anyone watching the housing industry: Inventory has plummeted.
Realtor.com’s report specifically reveals that there were 52 percent fewer homes on the market in March of this year compared to March of 2020. That adds up to 534,000 fewer homes on the U.S. market.
Not every metro area is feeling the squeeze equally, though. The report shows that, not coincidentally, Austin saw the biggest inventory decline, with listings down 72.7 percent year-over-year in March. Jacksonville, Florida, and Raleigh, North Carolina, also both saw their supply of homes drop by just over 70 percent.
Homes are also selling more quickly, spending on average 54 days on the market — which is six fewer days than last year at this time. In the 50 largest U.S. metro areas, average days on market was 39 in March, though of course agents in many of the hottest markets have anecdotally shared stories recently of homes going under contract much faster. Interest rates ticking upward also haven’t slowed things down.
“Rising interest rates have yet to deter buyers,” the report notes, “or perhaps, they are pushing them to act quickly.”
Realtor.com chief economist Danielle Hale put these numbers in context, pointing out in the report that if buyers “had 10 homes in their price range to choose from last year, they have less than five, perhaps as few as three, available to them today.”
“As a result, home prices have skyrocketed, shattering previous records,” Hale continued. “We expect to see more sellers emerge in the weeks ahead, which should give buyers more options. Homes will likely continue to sell fast, but increasing interest rates and monthly costs could slow the pace of price gains, unless we see a boost in demand from equity-rich repeat buyers.”