A surge in home prices came early this year, as the war in Ukraine reversed interest rate hikes and buyers faced intense competition over an “extreme shortage of homes,” according to a new Redfin report looking at the month of February.
The median home-sale price jumped 16 percent year over year, reaching an all-time high of $363,975, the report said. The median asking price rose 15 percent year over year — 27 percent since 2020 — to a record $390,488.
And while rising interest rates were expected to price buyers out of the markets, demand remains high, homes are selling for 0.8 percent over asking and there were fewer listings from a year before.
“The war in Ukraine has rattled the global economy, causing mortgage rates to fall after weeks of increases,” Redfin Deputy Chief Economist Taylor Marr said in a statement. “The dip in mortgage rates should buoy homebuying demand temporarily, fueling continued price gains. But demand may drop off if the Federal Reserve raises interest rates again as expected.”
Redfin reported that, for the week ending March 3, 30-year mortgage rates fell to 3.76 percent from 3.89 percent the prior week.
Homebuyer demand dipped slightly during the final week of February, but was 13 percent higher than a year earlier.
The number of active listings were down 24 percent compared to a year earlier, falling to an all-time low of 456,000. There were half as many homes for sale compared to the same time in 2020.
The report affirms findings from other companies. While the Redfin data looks back to 2012, CoreLogic reported last week that home prices had their biggest jump in the 34-year history of the S&P CoreLogic Case-Shiller Index.
Redfin had previously reported that January of 2022 was the most competitive month ever for homebuyers.
The National Association of Realtors said the existing home inventory was equal to about 1.6 months of the monthly sales pace. That pace was down from 1.7 months in December 2021 and 1.9 months in January 2021.