The pandemic and work-from-home orders have changed where, when and why people buy homes. As a result, housing prices hit the highest median of all time in 2021, as the number of homes for sale fell to an all-time low and the demand for second homes surged, according to a new Redfin report.
“The ongoing pandemic, including its seismic effect on the U.S. economy and the way Americans live and work, has made 2021’s housing market anything but typical,” said Daryl Fairweather, chief economist for Redfin. “Remote work, low mortgage rates, a shortage of building materials and wealth inequality that has allowed an influx of affluent Americans to buy vacation homes, to name just a few factors, have come together to create a historic year for real estate. Buyers paid more for homes, bought sooner than they planned and searched outside their hometowns. This year’s frenzied housing market has been one for the books — but it may become more balanced in 2022.”
Redfin compiled a list of 10 housing records set in the past year:
1. The typical U.S. home sold for nearly $400,000
The national median price for homes hit $386,000 in June, up 24.4% from last year. According to the report, the average sale price may hit another all-time high before the end of the year.
2. Home supply dropped to its lowest level in history
There were 1.38 billion homes for sale in June on a seasonally adjusted basis, down 23% year over year.
3. The typical home sold in just 15 days
An average of 15 days on the market is the lowest in history, down 39 days from June 2020.
4. Over 60% of homes went off-market in two weeks
An average of 61.4% of homes that went under contract in March had an accepted offer within two weeks of hitting the market, an all-time high.
5. More than half of homes sold above listing price
Of homes sold in June, 56.5% sold for above listing price, a record high and up 29.6% from a year earlier.
6. Mortgage rates dropped to 2.65%
The average 30-year fixed mortgage rate hit 2.65% the week ended Jan. 7, the lowest of all time.
7. Investors purchased nearly 1 in 5 of all homes sold in the U.S.
Real estate investors bought 18.2% of homes purchased in the country during the third quarter of 2021, up 11.2% from a year earlier.
8. Demand for second homes nearly doubled from before the pandemic
Second-home demand increased 91% from pre-pandemic levels in January, marking record growth.
9. Nearly one-third of Americans looked to move to a different metro area
In another side effect of the surge in remote work, 31.5% of Redfin users looked to move to a different metro area in the first quarter of 2021, an all-time high and up from 26% from a year earlier.
10. The typical luxury home sold for 25% more than last year
The median sale price of U.S. luxury homes jumped 25.8% year over year to $1,025,000 in the second quarter, marking record price growth.