The U.S. median home sale price reached a $360,500 record peak in the four-week period ending Dec. 19, according to data from the brokerage Redfin Corp (NASDAQ:RDFN). The new price marks a 15% year-over-year increase.
What Happened: The median asking price of newly listed homes during the same period was $347,475, up 14% from the same time one year ago and up 29% from the same period in pre-COVID-19 pandemic 2019. Pending home sales were up 0.1% year-over-year, the smallest annual uptick since June 2020, and were also up 46% compared to the same period in 2019.
Redfin attributed to the latest sales activity data to a limited supply — the number of homes for sale dropped by 26% to an all-time low.
"As the number of homes for sale drops to a new all-time low every week, homebuyers have a sense that the well is running dry," said Redfin Chief Economist Daryl Fairweather. "Fewer homes are selling because of a lack of supply, while demand remains strong. That's why home prices continue to climb higher and higher. But once mortgage rates increase in 2022, I expect the rate of price growth to slow down significantly."
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What Else Happened: Separately, the Mortgage Bankers Association (MBA) released its latest economic and mortgage market forecasts. For 2021, the MBA is predicting purchase originations to reach $1.61 trillion, setting a new record and bypassing the previous all-time high of $1.51 trillion from 2005. The trade group anticipates refinancing originations will come in at $2.32 trillion, down from last year’s $2.63. trillion but also still the third-highest ever. Overall, mortgage originations are expected to finish the year at around $3.93 trillion, slightly under 2020’s record of $4.1 trillion.
Looking ahead into 2022, the MBA expects total mortgage originations are expected to decrease to $2.61 trillion, with purchase originations aiming to set another record high at $1.74 trillion while refinance originations slide to $870 billion. Home-price growth is forecast to moderate to 5.1% while mortgage rates are expected to inch up and reach 4% by December 2022.
Photo: Paul Brennan / Pixabay
