Homebuyers hoping that a seasonal slowdown in the housing market would dampen rising prices can forget about it.
More buyers piled into the fray in September, spurred by record-low mortgage rates and a pandemic-induced stay-at-home culture, pushing sales to an even faster pace.
In the first read on September demand, homes sold 12 days faster than they did a year ago, according to realtor.com. Homes usually sell 25% faster in September than at the start of the year, but this year they sold 39% faster.
It took just 54 days to sell a home during the month. That is the shortest time since realtor.com began tracking this metric in 2016. Back then it took 78 days.
Regionally, properties in the Northeast spent 13 fewer days on the market than last year, while those in the South sold 11 days faster. In the Midwest it took nine fewer days to sell a home and seven fewer in the West. In the 50 largest metropolitan housing markets, the typical home sold in 44 days, 10 days faster than last year.
“Many buyers tend to put their home search on hold after the start of the school year, but remote learning and the desire for more space continued to fuel buyer interest in September,” said Danielle Hale, chief economist at realtor.com. “Unseasonably high buyer interest coupled with historically low inventory and favorable mortgage rates are creating a perfect storm in the housing market. While this is good news for anyone looking to sell their home, it has created tremendous competition among buyers.”
That competition is making bidding wars the rule rather than the exception. Typical buyers are paying about $20,000 more for a home and face 25% more competition than at the start of the year. Usually they face about 9% more competition.
The median price of a home sold in September was $350,000, up just over 11% annually. Some markets are seeing even steeper gains. Prices were up nearly 17% annually in Cincinnati, up 16% in Boston and up over 15% in Philadelphia.
The listings crunch is only getting worse, with supply down 39% annually. Compared with the start of this year, the number of listings was down 21%. September usually sees 17% more homes for sale than in January. Sellers are just not stepping up. There were nearly 14% fewer new listings compared with a year ago, an even steeper decline than August.
None of the largest 50 metros saw an increase in the number of homes on the market compared with last year and most (35 out of 50) saw a tougher supply crunch than in August. In some markets, like Kansas City, Missouri, Indianapolis, Indiana, and Memphis, Tennessee, the supply of homes for sale is half of what it was a year ago.