Home prices during September recorded a 7.8% year-over-year spike, according to the latest Radian Home Price Index (HPI) data released by Red Bell Real Estate LLC.
For the third quarter, the Radian HPI tracked an annualized home price increase of 8.9%, up from the 6.8% annualized gains in the second quarter. On a year-to-date measurement, the Radian HPI ascended at a 7.4% annualized rate, up from the 6.4% rate recorded during the first nine months of 2019.
Radian also reported the median estimated home price during September was $262,505, with all six Radian HPI Regional indices experiencing positive annual home price appreciation rates. During September, half of the nation’s 20 largest metro areas saw faster appreciation rates than the prior month, while 19 of these 20 metros recorded greater appreciation rates on a quarterly measurement.
“After slower home price growth in the second quarter, the third quarter of 2020 showed a clear return to the faster price appreciation reported at the end of 2019,” said Steve Gaenzler, SVP of Data and Analytics.
The number of closed home sales between July and September was 39% higher than the average third quarter going back to 2007. Furthermore, homes were selling at a faster clip— the average length of time properties that sold in September were listed prior to their sale tied an all-time low of 89 days on market.
However, Gaenzler also acknowledged housing supply is nowhere near the same level as demand—at the start of the third quarter, the number of active listings was only 8% higher than the level in December 2019, which was lower than any period during the Great Recession. As a result, there were nearly 165,000 fewer listings nationwide that would normally have been available to active buyers at the start of the summer buying season.
“Until there are clear signs of a change in the substantial imbalance in supply and demand, all signs would point to a continuation of gains for home prices,” Gaenzler said. “However, it is not unlikely that as prices continue to rise, affordability concerns may begin to cool appreciation rates in some markets.”
The Radian HPI is calculated based on the estimated values of more than 70 million unique addresses each month, covering all single-family property types nationwide.