House hunters chased a limited supply of homes last month, pushing buyer competition to new heights and lifting sales to their fastest pace since at least the great recession.
Homes found buyers in just 41 days in June, a record speed and four days faster than a year earlier, according to Redfin’s monthly Housing Market Tracker. Nearly 26 percent of houses, condos and co-ops found buyers in just two weeks, up from 22.6 percent in June 2015.
Denver led the pack, with half of all homes finding purchasers in just six days, down from nine days a year earlier. Seattle and Portland were close behind, with a typical house going under contract in only eight days.
Across the U.S., the supply of homes for sale dropped to 2.8 months as buyer demand outstripped supply by the widest margin in at least seven years. House hunters responded with aggressive purchase offers, and more than one in four homes sold for more than the advertised price, Redfin data showed.
What’s going on?
The housing market is working through a rare convergence of events. Prices have rebounded at a steady clip since the credit crisis shook America’s faith in owning homes. Mortgage rates are set firmly near historic lows. Steady job growth and rising rents have the country’s growing flock of millennials wading into homeownership for the first time.
Excluding brand-new construction, consumers were on track to buy 5.57 million homes this year, the highest rate of sales since February 2007, according to the National Association of Realtors.
Builders can’t break ground or stack bricks fast enough to handle that rising demand and shifting demographics.
And sellers are sitting on the fence despite home values. New for-sale listings were flat in June and the inventory of properties on the market continued to slide, down 7.1 percent year over year.
Measured year over year, median prices have been rising since March 2012, climbing 5.5 percent in June compared a year ago, according to Redfin data.
The lack of new listings continues to crimp sales and fuel competition, but homebuyers might get some relief later this summer. Mortgage rates, while low, have ticked up in the past two weeks. Lofty prices are discouraging some buyers, sending some to renew leases on their apartments. Competition could ease as a result. But major supply-and-demand woes will continue to drive up prices in the near term.