Record sales volume and supply challenges have been the driving force
Vigorous demand for residential homes continued to push house prices to new heights in October, but at a slower pace, according to new data from Radian.
The Radian Home Price Index (HPI) soared at an annualized rate of 7.5% to a median estimated price of $264,585. Although slower than September, the October figure is still the second-best appreciation month in 2020 thanks to a combination of record sales volume and relatively tight supply, according to the report.
Sales of residential homes hit an all-time high for any October on Radian's record, with the total number of closed home sales spiking 49% from the same period in 2007 and up 20% from a year ago.
“The end of the traditional summer season has collided headfirst into the second wave of COVID-19 across the US. As such, we would expect that the coming months, similar to the initial wave, will show slowing appreciation rates for homes,” noted Steve Gaenzler, senior vice president of data and analytics at Radian. “Lessening demand for housing due to typical seasonal patterns may reduce pressures seen through the first ten months of 2020. However, without active supply increases, home prices should continue to grow.”
Skyrocketing home prices continued to topple dollar gain records in the West region. Median home estimates in the region were more than $30,000 higher than they were at the end of 2019. Meanwhile, prices in the Mid-Atlantic region rose by $12,200 over the same period – representing the least absolute gain by a region.