The winter market is heating up as buyers keep a watchful eye on interest rates— expected to rise over the next year—despite a continuing inventory shortage keeping prices and competition high. According to realtor.com®’s recent Monthly Housing Report, December saw a bump in listing price growth, with the annual pace expected to return to last year’s spring and summer levels.
Key findings:
- The U.S. median home listing price was $375,000 in December—with the annual growth pace up 10%.
- Home prices for a typical 2,000-square-foot, single-family home increased 18.6% YoY.
- The annual pace of home-price growth was lower in the 50 largest metros (+5.4%), on average.
- The Southern (+10.1%) and Western (+8.3%) regions posted the biggest annual increases, while prices were flat in the Northeast (+0.7%) and declined in the Midwest (-2.8%) in December.
- More than one-quarter (13) of large markets posted double-digit, yearly home-price increases—up by more than 20% in Las Vegas, Austin, Tampa and Orlando.
- Properties sold in a median of 54 days in December.
- Days on market was lower in the 50 largest U.S. metros, at an average of 48 days in December, but posted a smaller yearly decline (-7 days).
- The South (-9 days) saw December’s fastest home sales compared to last year.
The takeaway:
“December data offers a fitting finish to the frenzy of the past year. Annual listing price growth hit double-digits again nationwide and in many of the hottest markets, after four months of single-digit pace this fall,” said realtor.com® Chief Economist Danielle Hale in a statement. “Despite buyer challenges like rising prices, limited inventory and fast-paced sales, real estate activity maintained a brisk pace throughout 2021 as factors like low mortgage rates enabled home shoppers to persist. With rate hikes now on the horizon, buyers may be trying to get ahead of higher monthly housing costs, in turn driving up competition and prices.”
“Our 2022 forecast anticipates affordability challenges this year, but also that trends like rising incomes and workplace flexibility could offer some Americans a better shot at finding a home,” added Hale. “For those who weren’t successful in 2021, we expect better luck in the coming months as more sellers plan to enter the market—and if December’s listings are an indication, with high asking prices in mind.”
