Redfin: Starter Home Sales Increase in August
(Image courtesy of Nik Cvetkovic/pexels.com)
Redfin, Seattle, reported that sales of “starter homes” rose 3.8% year-over-year in August.
That’s the highest August level of starter home sales in three years and the 12th consecutive month of increases.
In contrast, the sales of mid-price homes fell 0.6% year-over-year, and the sales of high-price homes fell 1.2%. Sales in both categories have been falling year-over-year every month since February.
Pending sales of starter homes are also up, increasing 3.1% year-over-year. Pending sales of mid-price homes fell 0.1% year-over-year in August, and pending sales of high-price homes fell 0.8% year-over-year.
Price-wise, the typical U.S. starter home sold for a record $260,508, up 2.2% from a year earlier. In contrast, mid-price homes’ prices grew 1.4% year-over-year, and high-price homes jumped up 2.7% year-over-year.
“Starter homes are holding up better than other price points because they’re the most attainable option in a market where affordability is still stretched,” said Redfin Senior Economist Sheharyar Bokhari. “First-time buyers and downsizers alike are competing for the same pool of smaller, less expensive homes, which is keeping demand relatively strong even as higher tiers remain sluggish. For many households, stretching into the mid-tier isn’t feasible with high prices and elevated mortgage rates.”
For those looking for starter homes, the inventory remains solid. Active listings of starter homes are up 16.4% year-over-year–the highest August level in almost a decade.
The typical starter home sold in 41 days in August, slightly slower than last year but on par with mid- and high-price homes.
Redfin defines a starter home as one where the sales price falls into the 5th-35th percentile. Mid-price homes are the 35th-65th percentile, and high-price homes fall in the 65th-95th percentile.
