Home prices have hit a record high in the new year
Price increases are following the pattern of 2021 and late 2020, with supply woefully inadequate compared with demand.
Consumers who resolved to buy a home in 2022 may have been dreaming of a reprieve from ever-climbing home prices, but so far, those dreams aren’t coming true. A new report from Redfin real estate brokerage found that median home sales prices reached a record high during the week ending Jan. 9.
The median sales price rose 16 percent for the week ending Jan. 9 compared with the same week in 2021 to $365,000 nationwide. Price increases are following the pattern of 2021 and late 2020, with supply woefully inadequate compared with demand.
“The stage is now set for the most competitive January housing market in recorded history,” Redfin’s chief economist, Daryl Fairweather, said in a statement. “Buyers are pouring into the market to claim a home before mortgage rates rise further as new listings slow to a trickle. The conditions are becoming increasingly challenging for first-time home buyers, who will have to compete against more experienced buyers who are willing to do whatever it takes to win.”
However, Fairweather anticipates that once mortgage rates rise to 3.6 percent, competition will slow to levels similar to late 2018.
The Mortgage Bankers Association forecasts that rates for a 30-year fixed-rate loan will reach 3.5 percent during the second quarter of 2022 and rise to 3.7 percent during the third quarter. The association expects rates to reach 4% by the end of 2022.
The number of active listings, which refers to all homes listed for sale at any point during a specific period, was down 28 percent for the four-week period ending Jan. 9 compared with those same weeks in 2021, according to Redfin. New listings are usually lower around the holiday season, but Redfin’s report found that new listings of homes for sale were even lower this year, down 11 percent for the four weeks ending Jan. 9 compared with those same weeks in 2021.
In other indications of a fast-paced competitive market, Redfin found that 29 percent of homes that went under contract during the four-week period ending Jan. 9 had an accepted offer within one week of going on the market, up from 25 percent during that same period in 2021.
The share of homes that went under contract within the first two weeks of going on the market was 39 percent, up from 34 percent in 2021. In addition, 41 percent of homes that sold during the four-week period ending Jan. 9 went for above their asking price, up from 33 percent during that period in 2021.
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