(NASDAQ: RDFN) -- U.S. home-sale prices increased 6.9% year over year in December to a median of $312,500, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage. Home prices were also up 1.1% month over month on a seasonally-adjusted basis, the largest increase since February 2018.
"Low mortgage rates and a strong economy fueled homebuyer demand in December, which boosted both home sales and prices," said Redfin chief economist Daryl Fairweather. "Prices heated up in West Coast metros like Seattle and Los Angeles, which indicates the slowdown of 2019 has officially ended in these markets."
Prices continued to increase the fastest in affordable metro areas in December. Among the 20 metro areas with the largest year-over-year price increases, 16 were below the national median, led in December by Memphis (median price $190,000, up 15.9%), Camden, NJ ($195,000, +14.7%) and Cincinnati ($187,000, +14.4%).
For the more expensive metro areas, a boost in the loan limits for mortgages backed by FHA, VA, Fannie Mae and Freddie Mac that takes effect in January could impact affordability and put upward pressure on home prices in the sweet spot of the limit increases. The new limit for most of the country is $510,400, up from $484,350 in 2019, while the limit in high-cost areas has increased to $765,600, up from $726,525 in 2019.
Of the 85 largest metro areas Redfin tracks, only two saw a year-over-year decline in the median sale price: In New York, home prices were down 2.4%, possibly as a result of the increase in New York City's "mansion tax" on homes priced above $1 million. In San Francisco, they fell 1.7%.
Market Summary December 2019 Month-Over- Year-Over- Month Year Median sale price $312,500 0.5% 6.9% Homes sold, seasonally-adjusted 276,800 1.0% 6.8% New listings, seasonally-adjusted 304,600 -1.3% -5.1% All Homes for sale 646,800 -14.6% -14.9% Median days on market 50 5 -2 Months of supply 2.6 -0.5 -0.8 Sold above list 19.1% -1.7 pts+ 0.6 pts+ Median Off-Market Redfin Estimate $283,400 -3.6% 3.6% Average Sale-to-list 97.4% -0.5 pts+ 0.3 pts+
+ - "pts" = percentage point change
Nationwide, home sales increased 6.8% year over year in December, the fifth consecutive month of increases, and were up 1.0% from November on a seasonally-adjusted basis.
The markets with the biggest increases in home sales from a year ago were Anaheim, CA (37.7%), North Port, FL (35.8%) and New Haven, CT (23.0%).
The supply of homes for sale fell 14.9% year over year, the biggest decline since March 2013 and the sixth straight month of declines. There were fewer homes for sale last month than any time since at least December 2012. Just one of the 85 largest metros tracked by Redfin posted a year-over-year increase in inventory: Knoxville, TN (5.3%).
Compared to a year ago, the biggest declines in the number of homes for sale were in Salt Lake City (-54.7%), Tacoma, WA (-44.3%) and San Diego, CA (-40.3%).
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 Redfin's data began in 2012. "Many homeowners have refinanced their mortgages to take advantage of low interest rates and therefore feel committed to staying put," continued Fairweather. "The lack of homes for sale is going to fuel competition and price growth in 2020."
Seasonally-adjusted new listings in December fell the most from a year earlier in Salt Lake City (-50.4%), followed by Allentown, PA (-39.3%) and Kansas City, MO (-38.9%).
Homes sold in December spent two fewer days on market compared to the prior year. In December, the typical home went under contract in 50 days, compared to 52 days in December 2018.
The share of homes sold above list price increased year over year, coming in at 19.1% in December compared to 17.3% a year earlier.
To read the full report, including additional metro-level data, please visit: https://www.redfin.com/blog/housing-market-news-december-2019.
About Redfin Redfin (www.redfin.com) is a technology-powered real estate brokerage, combining its own full-service agents with modern technology to redefine real estate in the consumer's favor. Founded by software engineers, Redfin has the country's #1 brokerage website and offers a host of online tools to consumers, including the Redfin Estimate, the automated home-value estimate with the industry's lowest published error rate for listed homes. Homebuyers and sellers enjoy a full-service, technology-powered experience from Redfin real estate agents, while saving thousands in commissions. Redfin serves more than 90 major metro areas across the U.S. and Canada. The company has helped customers buy or sell homes worth more than $85 billion.
For more information or to contact a local Redfin real estate agent, visit www.redfin.com. To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email firstname.lastname@example.org. To view Redfin's press center, click here.
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