After a remarkably hot summer, home sales are expected to peak this fall then taper off through 2021, though still staying above pre-pandemic levels, according to our latest sales and price forecast. Key market stats from the week ending Sept. 19 show depleted inventory levels plumbing new depths and prices skyrocketing over 2019 figures.
Housing market outlook improves, but lingering economic uncertainty tempers expectations
- Sales expected to stay high but taper through 2021: Seasonally adjusted home sales are expected to peak this fall then gradually decline through 2021. Sales volumes overall are forecasted to remain higher than pre-pandemic levels throughout this year and next.
- Home price outlook adjusted higher for coming year: Seasonally adjusted home prices are expected to increase 1.2% from August to November and rise 4.8% between August 2020 and August 2021. The previous forecast predicted a 3.8% increase in home prices over this time frame.
- Here’s why: The forecasts for seasonally adjusted home prices and pending sales are more optimistic than previous forecasts because sales and prices have stayed strong through the summer months amid increasingly short inventory and high demand. The pandemic also pushed the buying season further back in the year, adding to recent sales. Future sources of economic uncertainty, including lapsed fiscal relief, the long-term fate of policies supporting the rental and mortgage market and virus-specific factors, were incorporated into this outlook.
Rate of homes going under contract slows slightly, but time on market still short
- Buyers are still extremely keen to purchase houses, with newly pending sales up 21.8% compared to the same week a year ago. However, the frenzied activity of the summer is showing signs of slowing as the summer ends, dropping 2.8% compared to a month ago and down 1% from the week prior.
- Typical time-on-market for listings stayed steady at 13 days, which is 14 days quicker than last year. Among the 50 largest U.S. markets, Cincinnati and Columbus, Ohio, shared the shortest typical time on market at four days to pending (4). Nashville posted the longest typical time on market (33 days).
Inventory continues to fall
- The median sale price rose to $284,000 as of the week ending Aug. 8, 8.7% higher than the previous year and the largest year-over-year increase since at least the beginning of 2019. Sale prices were up 2% over the month prior.
- The median list price rose to $345,000, up a full 10% over last year but just 0.1% higher than a month prior.
New home sales astound in August
- New home sales have been particularly robust, even within this remarkably strong buying season. The annualized pace of new home sales in August exceeded 1 million homes — a benchmark unseen since 2006.
Source: zillow