SEATTLE, WA - The U.S. housing market accelerated to its fastest pace on record in May, according to Redfin, the next-generation real estate brokerage. The typical home went under contract in 42 days, a full week faster than a year earlier, and the lowest median days on market reported since Redfin began tracking this metric in 2009.
“After almost a decade of undersupplied housing stock, competition is fierce,” said Redfin chief economist Nela Richardson. “What’s new in 2016 is that we’re seeing the intensity of fast sales and bidding wars even in affordable markets like Grand Rapids and Omaha, where the typical home sold within two weeks last month.”
In May, home prices increased a moderate 4.3 percent year over year, down from the 4.8 percent growth rate posted in April. A shift in housing activity from expensive coastal markets toward affordable ones in the middle of the country helped keep a lid on price growth.
Sales surged 7 percent and inventory fell 6.6 percent in May from last year. The pickup in sales was widespread, as nearly a third of the markets Redfin tracks reported growth in the double digits. Affordable markets in the Midwest and the South led the surge in sales.
In Michigan, Detroit and Grand Rapids saw the number of homes sold surge by more than 50 percent from last year.
“We’re seeing an influx of buyers from places like San Francisco, Southern California, Seattle and Washington, D.C. Most new residents are lured by tech jobs and opportunities to work remotely,” said local Redfin agent Kent Selders. “Locals are watching prices rise, and many realize if they don’t buy soon, they’ll miss out while homes are still affordable. The result is incredible demand and rapid sales. Nothing like this has ever happened in Grand Rapids.”
Mortgage rates, which reached three-year lows this spring, are also making an impact on buyers.
“Move-up buyers have specifically noted they are buying now to take advantage of still-low mortgage rates,” said William Porterfield, a Redfin agent in Little Rock, Arkansas, where sales increased 33 percent from a year ago. “They’re focused on buying as much house as possible while interest rates are so low.”
To read the full report, complete with data and charts, visit Redfin.com