Sales Surge by Over 20% as Homes Sell a Week Faster than a Year Ago

The streak of record-shattering home sales stretched to three months in September, as closings rose 21.1% from a year ago. On average, homes sold in a mere 39 days – a full week faster than in September 2019.

Meanwhile, inventory plummeted 31.9% year over year as the number of homes on the market dropped to an all-time low in the 13-year history of the report.

Delayed by pandemic-related lockdowns, summer’s peak homebuying season pushed into fall. September sales were only 3.3% lower than August’s, while the average seasonal August-to-September drop-off over the previous five years was 15.3%.

September inventory sank below the previous report low set in August 2020. Thus far, six months of 2020 rank among the 10 months with the lowest inventory in the history of the report.

The Median Sale Price of $289,900 was just $100 below the report record set in August 2020, and 12.8% above September 2019. Also increasing in September was the Months Supply of Inventory, which ticked up to 1.8 from the record low of 1.7 set the previous two months. A year ago, Months Supply of Inventory totaled 3.8.

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Home Sales Sizzle Amid All-Time Low Inventory, Rising Prices

The blistering hot streak of U.S. home sales continued in August, reaching record levels for the month. August also set new report records for lowest inventory and days on market as well as highest median sales price.

August home sales, continuing a torrid summer, were the highlight of the month. Year over year, home sales rose 4.3% and marked the third-highest total in the report’s 13-year history covering 53 metro markets. July 2020 holds the report record for most home sales, followed by June 2017. Year to date, 2020 home sales trail 2019’s by only 3% after being 9% lower through May.

While sales climbed, the number of homes on the market in August plunged 29.6% year-over-year – to an all-time report low. And in a related metric, the 1.7 Months of Inventory tied July for the lowest in report history.

This high-demand, low-supply dynamic drove the Median Sales Price to $290,000, topping the previous report record of $285,000 set just one month ago in July. Prices rose 11.5% from August 2019, the highest year-over-year increase in more than six years.

On average, homes spent a mere 41 Days on Market – tying July 2018 for the shortest time in report history. Fourteen markets reported 30 days or less from listing to contract signing. Compare that to August 2019, when average Days on Market totaled 45.

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July Home Sales Jump 8.7% Despite Low Inventory, Ending Recent Skid

In a significant upward shift, July home sales rose 8.7% over July 2019, halting a streak of year-over-year sales declines triggered by the COVID-19 pandemic. July’s market was blistering hot despite the lowest Months Supply of Inventory (1.7 months) in the 12-year history of the report.

July set a report record for most home sales in any month among the report’s 53 metro markets. Seven months into 2020, home sales are just 4.8% below 2019, compared to the end of May when the year-to-date total was 8.9% behind last year’s pace. Surprisingly, 2020 monthly sales have exceeded 2019 in four out of seven months thus far.

Finding a home to buy remains the biggest challenge for many. July inventory dropped 30.1% from July 2019, a report record, and was the ninth consecutive month of double-digit declines year over year. The only three months with lower inventory totals were two winters ago: December 2017 and January and February 2018.

July’s 1.7 Months of Inventory marked only the second month in report history with below 2 months supply. Even with year-over-year declines factored in, housing inventory is typically at its highest during the summer months.

July’s Median Sales Price of $285,000 is up 8.6% year-over-year. This is in line with pre pandemic rises in price after smaller year-over-year price increases of 4.7% and 1.9% in May and June, respectively. Days on Market averaged 44, an increase from 43 the previous July.

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Home Sales Post Near-Record Turnaround Despite Inventory Constraints

June home sales posted a near-record 37% gain over a pandemic-impacted May while Months Supply of Inventory dropped below two months for the first time in the report’s 12-year history.

Overall, U.S. home sales returned to near seasonal levels – just 6.9% lower than last June, which was the third-highest sales month of 2019. All of the report’s 53 metro markets posted gains over May and a third of them topped last June. The June results were far different than those of May and April, which both reflected widespread stay-at-home mandates in many states.

The 37% increase in sales from May to June was the third-highest month-over-month turnaround in the report’s history. The 12-year average for May-to-June sales increases is 8.4%.

Going in the opposite direction, inventory dropped 27.9% year over year, pushing the Months Supply of Inventory to 1.9 from the previous report low of 2.7 months set in May. The number of homes for sale is at low levels not seen consistently since early 2018.

June’s Median Sales Price of $275,000 is up 1.9% year over year, the lowest year-over-year price increase of any month since December 2018’s 0.4% price drop.

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Home Sales Down 34% Over Previous Year While Price Increases Remain

May, often the second-strongest month for home sales, saw what many believe may be the biggest housing impact from the pandemic as closings dropped 33.7% compared to last year.

All 53 markets in the report sustained double-digit year-over-year sales declines:

• Sales in four markets shrunk by more than half, led by Detroit’s drop of 64.8%

• Eighteen markets saw sales drop by one-fourth to one-third

• Des Moines’s sales decline of 14.3% was the smallest

While the Median Sales Price of $272,000 was up 4.7%, it was softer than the 5.4% average May-to-May price increase in the previous five years.

Inventory dropped 25% year-over-year to one of the lowest levels for May in the report’s 12-year history. Only Indianapolis (12.7%), Wichita (4.3%) and Chicago (1%) posted increases in the number of homes for sale compared to May 2019.

With May being the second full month under stay-at-home mandates in many states, home sales were the lowest for the month since 2012, and on a par with wintertime home-sales activity. Compare that to 2017, 2018 and 2019, when May posted the highest or second-highest home sales of the year. June typically sees the year’s most home sales and highest Median Sales Price.

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Pandemic Curbs Home Sales By 20% Year-Over-Year, Prices Remain Strong

Fewer sellers, fewer buyers: The first full month of coronavirus stay-at-home orders weighed on April home sales, causing them to drop an average of 20.2% compared to a year ago. Inventory in the report’s 53 markets similarly tumbled by 20.5% year-over-year, while the Median Sale Price of $276,000 was up 9.3%.

Restrictions to prevent the spread of COVID-19 turned what is traditionally the year’s fifth busiest month for home sales back to slumbering wintertime levels. Four markets –  New York, Detroit, Miami and San Francisco – posted year-over-year sales declines of more than 40%. Just two markets – Minneapolis, MN and Billings, MT – reported an increase, while eight saw declines of less than 10%.

Like March, April is a transition month toward peak home sales in the summer. In a typical year, the busiest month is often May or June, with July and August being close behind.

Days on Market dropped seven days to 46 year over year, setting a new low for April in the report’s 12-year history. By contrast, Months Supply of Inventory grew from 3.0 to 3.5.

The Median Sales Price of $276,000 also was a report record for April.

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Despite the advance of the coronavirus across the U.S. in the second half of the month, March home sales increased 2.7% year-over-year in the report’s 52 markets – a hint of what might have been.

March was the fourth consecutive month with year-over-year increases in U.S. home sales – a streak not seen since 2016. But the spread of COVID-19, and the initiation of governmental measures to slow it, dampened the month’s overall sales results:

• March’s year-over-year sales growth of less than 3% was significantly less than December 2019 through February 2020 where year-over-year sales increases averaged 10%.

• The sequential monthly growth in sales from February to March is typically the largest month-over-month percentage increase each year, averaging 32%. This year, March sales increased just 23.8% over February – the lowest such increase for this time period in the report’s nearly 12-year history.

Inventory levels in March continued to constrict amid healthy buyer interest, which helped drive further price increases. Year-over-year, March inventory declined 14.9%, continuing a streak that began in July 2019. Meanwhile, the Median Sales Price of $265,000 was 7.7% higher than a year ago, setting a report record for the month of March. A record low for March was the 54 Days on Market, while 2.7 Months Supply of Inventory was typical for the month, based on the past four years.

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Representing the last full month before the coronavirus became a global pandemic, February saw the third consecutive month of year-over-year increases in U.S. home sales – a streak not seen since 2015. At the same time, inventory across the report’s 53 metro markets plunged 15.8%, marking the fourth successive month of double-digit percentage, year-over-year declines.

Before the coronavirus struck the U.S. on a large scale, home sales in February – which enjoyed an extra weekend day for Leap Year – increased 7.5% year over year, following strong increases of 13.5% and 10.5% in December and January. The previous streak of increasing year-over-year sales of three months or longer began in December 2015 and continued seven months into June 2016. That was also a period of large inventory declines, like the current stretch of year-over-year drops in inventory that is now at eight months.

February’s Median Sales Price of $260,000 posted a year-over-year increase of 7.9% – the 14th consecutive month where home prices have shot up.

In the nearly 12-year history of the report, three February records were set last month:

·       Fewest Months Supply of Inventory: 2.8

·       Fewest Days on Market: 60

·       Highest Median Sales Price: $260,000

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Last month’s home sales posted the highest year-over-year gain for January in 11 years, increasing an average of 10.5% in the 54 metro areas covered by the report. Meanwhile, the 15.6% year-over-year drop in inventory was the largest decline since May 2017 and marked the seventh consecutive month of year-over-year shrinkage in the number of U.S. homes for sale.

Despite very low inventory, January and December (+13.5%) marked the first back-to-back months with double-digit year-over-year growth in home sales since June and July of 2015.

January’s Median Sales Price of $256,000 – though 3.4% below December – was 8.9% higher than January 2019 and extended the string of year-over-year price increases to 13 months.

In the nearly 12-year history of the report, three January records were set or tied last month:

·         Fewest Months Supply of Inventory: 3.1

·         Fewest Days on Market: 59 (tied with January 2019)

·         Highest Median Sales Price: $256,000

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December posted a record finish to a year and a decade, with a year-over-year increase in home sales of 13.5% in the 54 metro areas covered by the report. That was the highest increase of any month in 2019, and the highest for the month of December since 2009.

Also posting a record for 2019 was the inventory decline of 14.5% year-over-year, accompanied by corresponding drops in Months Supply of Inventory – 3.3 vs. 4.8 a year earlier – and Days on Market – 54 compared to 55 a year ago.

Year-over-year, sales were up five months in 2019, with the majority occurring in the back half of the year. Inventory, meanwhile, grew year-over-year in each of the first six months, then shrunk in each of the last six months.

The Median Sales Price of $266,000 was 11.1% higher than December 2018 and the highest year-over-year increase for any month of 2019.

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