With housing supply constrained and mortgage rates on a downslope throughout the year, buyers jumped at purchasing a home when the opportunity arose in June, according to Redfin.
While prices rose 3.4% annually to a median of $321,200, it was a step down from 5.5% in June 2018. With affordability boosted through slower appreciation and low interest rates, the median home for sale only spent 35 days on the market — matching the record set one year prior. Tacoma, Wash., and Grand Rapids, Mich., were the fastest metro areas in the nation, both only needing seven days before going under contract. Boston was third with nine days to sell.
Despite the speed, overall sales dropped 8% year-over-year, mostly due to the inventory of new listings falling 5.7% annually and 12.5% month-over-month.
"As national home price growth stabilizes, we're continuing to see supply and demand dynamics play out differently in affordable inland markets than in expensive coastal markets," Daryl Fairweather, Redfin's chief economist, said in a press release. "In places like Philadelphia and Cleveland, where home prices are growing by double digits and buyers are rate- and price-sensitive, falling mortgage interest rates make buying a home this summer increasingly attractive. But without a commensurate increase in the number of homes for sale, some of the most affordable markets are driving nationwide home prices up."
Granularly, Knoxville, Tenn., led the country's 85 largest housing markets in price appreciation, increasing 16.3% year-over-year. Philadelphia followed at 14.9% and Camden, N.J., was third at 13.9%.
"Meanwhile, expensive markets like the Bay Area and Seattle are still feeling a chill with falling prices and many more homes for sale than there were a year ago," Fairweather continued. "Unlike their inland counterparts, buyers in these once-hot West Coast markets are less likely to feel the urgency to buy while rates are low and before prices rise more. As long as mortgage rates and inventory are low, we'll see more buyers competing for homes and driving up prices in places where they are still relatively affordable. And without more homes to buy, particularly at affordable price points, sales will continue to lag."
Six metro areas experienced drops in year-over-year median sales price, headed by affluent coastal markets. Silicon Valley continues to see large declines, with San Jose, Calif., falling 4.9% annually in June. Oxnard, Calif., closely trailed with a 4.8% decrease and Oakland, Calif., had the third-biggest drop at 2%.
