In December, home sale-prices climbed 6.9% year over year, rising to a median of $312,500 across 217 housing markets, according to new data from Redfin.
Month over month, home sale-prices rose 1.1% on a seasonally adjusted basis, marking the largest increase since February of 2018.
Daryl Fairweather, Redfin’s chief economist, said December’s price growth is largely attributed to the nation’s relatively low mortgage rates, which boosted homebuyer demand during the month.
“Low mortgage rates and a strong economy fueled homebuyer demand in December, which boosted both home sales and prices,” Fairweather said. “Prices heated up in West Coast metros like Seattle and Los Angeles, which indicates the slowdown of 2019 has officially ended in these markets.”
According to Redfin’s analysis, the number of homes listed for sale in December increased by 6.8% from the previous year, marking the fifth consecutive month of increases.
However, supply weakened during the month, as the number of homes for sale fell 14.9% on an annual basis, representing the sixth straight month of declines and the biggest drop since March of 2013.
The rapid reduction in supply can be attributed both to the increase in home sales and to a decline in new listings, which fell 5.1% in December from a year earlier—the largest drop on record since 2012, Fairweather said.
“Many homeowners have refinanced their mortgages to take advantage of low-interest rates and therefore feel committed to staying put,” Fairweather said. “The lack of homes for sale is going to fuel competition and price growth in 2020.”
In December, the share of homes sold above list price grew year over year, coming in at 19.1% compared to 17.3% a year earlier.
Out of every housing market, home prices rose the most in Memphis, rising 15.9% from last year to $190,000. This was followed by Camden, New Jersey, which boasted the second highest at 14.7% year-over-year price growth.
