Listed homes are selling at a significantly faster pace thanks to an evaporating housing inventory, according to the latest Realtor.com’s Weekly Recovery Report.
For the week ending August 22, the average time on the market is nine days less than last year while buyers are sorting through an inventory that is down 37% from one year ago. As a result, median listing prices soared by 10.3% on a year-over-year measurement, the fastest pace of growth since January 2018 and the 15th consecutive week of price growth at or equal to the previous week's yearly pace.
The Weekly Housing Index leverages a weighted average of Realtor.com search traffic, median list prices, new listings and median time on market and compares it to the January 2020 market trend, which is used as the baseline for pre-COVID market growth. The overall index is set to 100 in this baseline period, and the recovery period is judged as improving or deteriorating whether the market’s index value rises or falls.
The Realtor.com Housing Market Recovery Index reached 106.6 nationwide for the week ending Aug. 22, up by 1.8 points from the previous week 6.6 points above the pre-pandemic baseline of January 2020. The “housing demand” component of the index—which tracks growth in Realtor.com search traffic—was at 124.1, the highest index value since March, but the “housing supply” component that measures new listing growth declined to 95.5.
"There's a record level of buyers competing in the housing market right now," said Javier Vivas, Director of Economic Research for Realtor.com. "In a typical year, buyer-seller activity would be dwindling down heading into Labor Day, but 2020 has been nothing short of abnormal. It may be late August, but we're in the thick of the homebuying season, with busy open houses, multiple offers and even bidding wars becoming the common theme in many markets. First-time home buyers face the biggest hurdles and have to lean on financing to keep their home ownership dreams alive".