A critical lack of single-family homes for sale has created the fastest, priciest housing market on record, with home prices, mortgage payments and other sales metrics reaching all-time highs, a Redfin report revealed.
Homebuyers had an average monthly mortgage payment of $1,997 on houses within the median asking price range for the four week period ending Feb. 13 — the highest amount within that category in Redfin’s data, which dated back to 2012. That monthly payment amount was up 27% from the same time in 2021 when mortgage rates were 2.73% and up 31% from 2020 when rates were 3.47% at the cusp of the pandemic.
The median asking price of newly listed homes also reached a new high of $381K, up 16% since 2021 and 26% from February 2020, just before the onset of the coronavirus pandemic.
Shrinking supply has driven rising prices, experts say, a problem exacerbated by high material costs and labor shortages cutting into new home construction. Active listings are at a record low, with 447,000 homes on the market, a 27% decline from last year and 49% drop from 2020. Redfin Deputy Chief Economist Taylor Marr compared the market to a bathtub, with water, or supply of homes, flowing down the drain faster than new supply can fill it.
“Bottom line: without a flood of new listings we will be sitting in a very shallow bath for a while,” he said in a press release.
Homes today are selling faster than ever, with 57% of home sellers accepting an offer within the first two weeks on the market and 44% accepting within one week, both all-time highs according to Redfin. In total, homes are on the market for a median of 29 days, down from 38 days in 2021 and 60 days in 2020.
Investors chasing single-family rental opportunities put another strain on supply, since they’re competing with prospective homebuyers and paying cash in just over 75% of their purchases. Through the end of January, investors already dedicated $5 billion in their pursuit of single family rental assets, according to John Burns Real Estate Consulting.
Rising mortgage rates could cool demand, Marr said. The average 30-year fixed rate mortgage sits at 3.92%, approaching its highest level since 2019 because of high inflation and consumer spending, Freddie Mac chief economist Sam Khater said earlier this week.