Housing inventory in the U.S. has fallen by 37% since just one year ago. Meanwhile, the increased demand among buyers has led to more bidding wars and a very rapid pace of sales, realtor.com said in its latest Weekly Recovery Report.
Now, homes are selling nine days faster than they were a year ago, even as prices rise, the report found. In addition, the National Association of Realtors said in a report Thursday that contract signings in July rose by 15.5% compared to a year ago. According to Lawrence Yun, chief economist of the NAR, sales show no sign of slowing down.
“There’s a record level of buyers competing in the housing market right now,” said Javier Vivas, director of economic research at realtor.com. “In a typical year, buyer-seller activity would be dwindling down heading into Labor Day, but 2020 has been nothing short of abnormal. It may be late August, but we’re in the thick of the home buying season, with busy open houses, multiple offers, and even bidding wars becoming the common theme in many markets. First-time home buyers face the biggest hurdles and have to lean on financing to keep their homeownership dreams alive.”
Realtor.com’s Housing Market Recovery Index reached 106.6 nationwide for the week ending Aug. 22, which is 6.6 points above its pre-pandemic baseline of January 2020. The housing demand component of the index, which is measured by growth in search traffic, is also above the recovery baseline at 124.1, its highest level since March. The housing supply component, not he other hand, measured by new listing growth fell to 95.5.
Meanwhile, home prices continue to accelerate. Median listing prices increased 10.3% over last year, the fastest pace of growth since January 2018, realtor.com reported.
The report said this a “remarkable feat considering the economic backdrop of a recession and continuing job losses. Consistently rising home price growth is the market’s answer to balancing the insufficient availability of homes for sale against a steady stream of home buyers.”