It’s the end of October, but the U.S. housing market is acting like it’s June.
Spurred on by historically low mortgage rates, buyers are racing to snap up homes, defying seasonal norms even as Covid-19 infections surge in some states. Average listing times are down, and prices in a handful of metropolitan areas are up more than 20% from last year.
“Normally, buyers get a seasonal break,” said Danielle Hale, Realtor.com’s chief economist. This year, “we’re just not seeing that.”
The boom is the latest twist in a year that’s been anything but normal. After the pandemic severely curtailed home sales in March and April, deals came roaring back, especially in suburbs and more-affordable cities. With few properties on the market, demand is far outstripping supply and leading to bidding wars.
The typical U.S. home went under contract in 16 days in September, according to research from Zillow. That’s faster than the pace in June 2018 and 2019, the month when listings moved quickest in those years. In some affordable Midwestern markets, such as Kansas City and Cincinnati, houses sold in five days or fewer on average last month.
Meanwhile, prices soared more than 20% in the Kansas City, Philadelphia and Memphis, Tennessee, metro areas last month, according to data from Redfin Corp. Fairfield County, Connecticut -- which includes tony Greenwich -- saw a 33% gain.
Trading Up
While homes that are less expensive are selling the quickest, they’re moving briskly across all price points. With mortgage rates dropping to record lows nearly a dozen times this year, buyers are trading up into larger properties so they can more comfortably accommodate remote work and school. Younger renters are also making the move to homeownership.
Hannah Schigel, a 24-year-old nurse in Cincinnati, is one of them. In late September, she found a listing for a two-bedroom ranch house that she liked in the city’s Oakley neighborhood. By the time she was able to tour it the following afternoon, there were already a few offers. She scrambled to put in her own that day, and it was accepted at $196,000.
Because of low mortgage rates, her costs will be about $1,070 a month, compared with the $1,008 she was paying to rent. The house was move-in ready, she said, with hardwood floors, new cabinets and a fenced-in backyard where her French bulldog can run around.
“I knew when I saw this house it was going to go quick,” Schigel said. “I felt like I had to go for it.”