Redfin: May Home Prices Post Largest Year-Over-Year Increase in 7 Months
Redfin, Seattle, said U.S. home-sale prices edged up again in May, growing by 3.6 percent from a year ago to a median of $315,700, the largest annual home price increase in seven months.
Only six of the 85 largest metro areas Redfin tracks saw a year-over-year decline in their median sale price, most notably a 6 percent drop in San Jose, a 2.5 percent dip in New York and a 2.2 percent decline in Honolulu. The other metros that saw price drops were in California: Orange County (-1.4%), Los Angeles (-0.8%) and Oakland (-0.7%).
Redfin chief economist Daryl Fairweather said as mortgage rates fell in MAy, Redfin has seen upticks in the number of people wanting to talk with its agents about buying homes and the number going on home tours. “Recent surges in mortgage applications also reflect the impact low rates are having on homebuyer demand nationwide,” she said.
Fairweather noted Redfin has not yet seen a commensurate increase in U.S. home sales, and doesn’t expect sales to increase substantially in the long run. “That’s because there still aren’t enough homes for sale for all of the people who want to buy homes,” she said. “In May, inventory posted its smallest increase in eight months, and fewer new listings came on the market than last year. Low rates and rising prices will likely lure sellers onto the market this summer, but the lack of new construction will continue to hold back sales growth.”
Redfin reported home sales were essentially flat in May, up 0.2 percent year over year. Forty-eight of the 85 metros tracked by Redfin saw an increase in sales from a year earlier. The number of homes for sale as of the end of May rose by 2.5 percent from a year ago, the smallest year-over-year increase in home supply in eight months. The number of homes newly listed for sale last month fell 0.7 percent from a year earlier.
Redfin did note median number of days on market, an indicator of market activity dropped to 36 days in May from 37 days a year earlier, the lowest days on market measured in any month of May since at least 2010. On the other hand, an indicator pointing to a cooler market is the share of homes for sale that had a price drop, which rose to 25.9 percent, the highest rate since September’s record high, and up from 23.4 percent last year. The share of homes sold above list price is also falling, down to 24.4 percent in May from 28 percent last year. Still, last month’s rate of homes selling above list price was the highest since last August.
