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Home prices continued to see increases in early October according to Zillow's Weekly Market Report. While newly pending home sales are on the rise, the lack of inventory helped sellers keep their upper hand in the housing market.
"The consequences of months of tightening inventory are being felt keenly by the nation's housing market in the form of jaw-dropping price appreciation this fall," said Zillow senior economist Jeff Tucker. "Our data on closed sales show sellers within a hair's breadth of double-digit year-over-year appreciation, an outcome almost unthinkable after prices stalled out in the depths of nationwide lockdowns this spring. Strong price growth seems poised to continue into the near future as buyers battle to outdo each other, bidding on a record-small pool of homes for sale."
The buyer mania kicked off in June and is only now showing signs of a slight cooldown. Newly pending sales have now dipped for the fourth consecutive week, however, they are still 17.6% higher than the same time in 2019. They are now down 2.2% from last week and 7.3% month-over-month, according to Zillow. Houses are still flying off the market, spending just 13 days on the market, 15 days faster than the same period last year.
Unfortunately, home prices will likely be bolstered by record-low inventory. According to the report, total for-sale inventory dropped 1.2% week-over-week and is 35.7% lower than the same period last year.
"Median list price rose slightly week over week to $345,225 and now stands 10.9% higher than last year -- the largest year-over-year gain since at least 2019," according to the report.
"List prices have grown rapidly since early May when the median was $317,228 -- down 0.2% year over year."
We reported that Veros Real Estate Solutions' VerosForecast predicts home prices will continue to rise through Q3 2021. Given the current economic status, it's likely that the Federal Reserve continues to maintain low rates as long as it takes for the economy to bounce back.