Radian: Home Price Appreciation Accelerates in July
Radian, Philadelphia, said after a strong finish to the first half of 2021, home prices across the United States rose at an even faster pace in July.
The Radian Home Price Index, released by subsidiary Red Bell Real Estate LLC, reported home prices nationally rose month-over-month from June to July at an annualized rate of 14.7 percent. The HPI also rose 10.9 percent year-over-year, slightly higher than the increase recorded last month. Through the first seven months of 2021, the monthly annualized increase averaged 10.7 percent with each of the last three months reporting above average appreciation.
The Radian HPI is calculated based on the estimated values of more than 70 million unique addresses each month, covering all single-family property types and geographies.
“The addition of more active home listings into the market inventory has not slowed the path of home price gains,” said Steve Gaenzler, Radian Senior Vice President of Data and Analytics. “Nationally and in most local markets, homes sales volume remains at all-time highs while supply is far below historic norms.”
Gaenzler noted home prices are not showing any signs of softening or slowing their gains of 2021. “However, while appreciation rates have continued to rise, price affordability has declined,” he said. “Even with recent reductions in mortgage rates, consumers are buying into a less affordable market which may impact future activity and price growth.”
The report said nationally, the median estimated price for single-family and condominium homes rose to $286,434. Across the U.S., home prices nationally rose 13.1 percent over the prior three months, an increase over the second quarter’s 11.7 percent increase. The average number of days a home was on the market prior to contracting for sale dropped to 66 days in July, the shortest list-to-sale period on record. The report also noted homes that are listed but have not yet contracted for sale have also set a record last month for the shortest number of days on market. At only 85 days on market for actively listed properties, the rate of turnover of homes continues to be buoyed by lack of supply.
Radian said with the exceptions of only 2015 and 2020, in every year since before the Great Recession, June has been the most active sales contract month and July was the second most active. The same pattern has emerged in 2021. The average number of monthly home sales thus far in 2021 reached 305,000 per month. That is more than 10 percent higher per month than the average 275,000 homes sold in each of the first seven months of 2020.
All six U.S. regions reported positive price appreciation in residential housing markets in July 2021. Year-over-year increases in home prices ranged across the regional landscape from 12.9 percent (West) to 9.2 percent (MidAtlantic). The report said appreciation rates remained higher over the most recent months: The July appreciation rates annualized ranged from 12.7 percent (MidAtlantic) to 16.5 percent (South). In July, all regions appreciated at annualized rates greater than 12 percent.
The report said demand was consistently strong as all six regions notched record low days on market for sold properties. The West region, which carries the highest average sales price and the highest estimated median sales price also recorded the shortest days on market at 58. The Mid-Atlantic region took the longest to sell, but still logged a record at 85 days.
Among the 51 states and territories the Radian HPI tracks, Idaho continued to be the fastest appreciating state in the nation. Nationally, states displayed a wide range of annualized appreciation rates in July 2021 from the low of 5.4 percent in Iowa to the high of more than 35 percent in Idaho.
Across the 20-largest metro areas of the U.S, seven reported slower price appreciation compared to the prior month, while the other four were unchanged from prior months. Only nine of the largest metro areas recorded an increase in the rate of home price appreciation from June. The Atlanta metro area has the lowest estimated median price of the 20-largest metros while San Francisco, the only metro with an estimated median of more than $1 million dollars, has the highest.
Additional clarity on home prices comes out this morning with the S&P CoreLogic Case-Shiller Home Price Indices; MBA NewsLink will provide coverage.