According to Radian Home Price Index (HPI) data released today by Red Bell Real Estate LLC, a Radian Group Inc. company, home prices nationally rose from the end of November 2020 to the end of December 2020 at an annualized rate of 8.5 percent.
For the full year, the Radian HPI rose 8.0 percent year-over-year (December 2019 to December 2020).
For the first six months of the year, home prices nationally appreciated at an annualized rate of just 6.5 percent. However, the last two quarters recorded an annualized increase of 9.3 percent.
For the calendar year, national real estate records were broken in several statistical categories:
- Highest average sales price: $381,316
- Shortest days on market to sale: 93
- Number of closed sales: 3.6 million
- Average active monthly listings: 1.2 million
“In the end, there was nothing typical about 2020,” says Steve Gaenzler, SVP of data and analytics at Radian Group. “As the country shut down in March, no one predicted what would happen over the remainder of the year. Despite a global pandemic, social unrest at levels not seen in generations, and a divisive political environment, the U.S. housing market thrived.”
The national median estimated price for single-family and condominium homes rose to $268,655, representing a more than $19,940 increase in the calendar year. 2020 recorded both historic low average monthly listing counts (supply) as well as record high sales volume (demand), as homes moved very efficiently through the real estate process.
A review of the year by home price reveals some interesting trends: higher-priced homes (those listed above $250,000) did not encounter record low average monthly supply but did achieve record sales volumes. However, while lower-priced homes (those listed at or below $250,000) suffered from record low listings (supply), sales volumes did not tally any records. This suggests that higher priced homes were in higher demand than starter or lower priced homes – something not surprising given the disparate impact the national pandemic had on certain lower income families.
Across the U.S., home prices nationally rose 9.4 percent in the final quarter, the strongest quarter of the year, and a strong increase over the first, second and third quarter appreciation rates of 6.3, 6.6 and 8.9 percent, respectively. The imbalances between housing supply and demand continued to provide solid support for home prices throughout the year.
On the demand side, December 2020 recorded the highest level of monthly home sale transactions as compared to any previous December and was the second strongest month of any fourth quarter. Strong demand for limited supply continues to keep the average number of days that a property for sale is listed before going under contract in December at the shortest levels in over a decade, and near the record low for days on the market.
Regionally, five of six regions had stronger home price appreciation in 2020 than they did in 2019. The Mid Atlantic region, which includes New York, Philadelphia and the Washington-Baltimore region (all areas severely impacted by COVID-19 and associated economic pains), was the only region to record lower annual appreciation. However, at +6.5 percent, the region still did quite well.
The strongest-performing region of 2019, the Midwest, held on to the title through 2020. Notably, the West and Northeast, two of the weakest performing regions of 2019, were the second and third best in 2020. Other than the Mid Atlantic, regional performance was similar with all regions ending the year with appreciation rates between 7.5 and 9.1 percent.
Photo: Steve Gaenzler