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U.S. Home Prices Continue to Rise on Housing Imbalances, Radian Home Price Index Reveals

After a strong finish to the first half of 2020, home prices across the United States rose at a slower pace in July as compared to June. According to Radian Home Price Index (HPI) data released today by Red Bell Real Estate, LLC, a Radian Group Inc. company (NYSE:RDN), home prices nationally rose from June 2020 to July 2020 at an annualized rate of +6.8 percent.

The Radian HPI also rose +8.1 percent year-over-year (August 2019 to July 2020), which was unchanged from the year-over-year increase recorded last month. Through the first seven months of 2020, the average monthly annualized increase was +7.8 percent with each of the last four months reporting above average appreciation. The Radian HPI is the most comprehensive and timely measure of U.S. housing market prices and conditions. 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 and geographies.

“Home prices across the U.S. continued an impressive appreciation run in July. When contrasting the effect on home prices of negative COVID headwinds on the U.S. consumer and economy versus the trifecta of historic low mortgage rates, near record low supply of homes for sale and increased demand for homeownership, so far home prices have come out on top,” noted Steve Gaenzler, SVP of Data and Analytics. “While not contained in current data, recent changes to housing policy from the White House, Congress and the Government Sponsored Enterprises (GSEs) related to future stimulus and forbearance provisions, along with continued unknowns related to COVID-19 may begin to weigh on housing in coming months,” added Gaenzler.

NATIONAL DATA AND TRENDS

  • Median home price in the U.S. rose to $258,206
  • Home prices rose an annualized +6.8 percent over the last three months

Nationally, the median estimated price for single-family and condominium homes rose to $258,206. Across the U.S., home prices nationally rose +6.8 percent over the prior three months, a slight increase over the second quarter. On-going imbalances between housing supply and demand continue to provide solid support for home prices. On the demand side, July 2020 recorded the highest level of monthly home sale transactions over the last decade. Conversely, supply of homes in July, as measured by the count of listings of homes for sale, was -15 percent below the average monthly count over the last 5-years, and nearly -27 percent below the peak monthly listing count over the same period. Strong demand for the limited supply also pushed the average number of days that a property for sale has been listed to 114 days, the shortest stay in over a decade.

REGIONAL DATA AND TRENDS

  • July gains were solid across all regions
  • From year earlier, Midwest maintains strongest Region while Northeast remains weakest

Similar to the national reporting, all U.S. regions reported positive price appreciation in residential markets in July 2020. Year-over-year increases in home prices ranged across our regional landscape from +9.9 percent (Midwest) to +4.3 percent (Northeast). All other regions recorded annual price appreciation rates between +6.5 and +7.8 percent.

In July, all but five U.S. states reported the highest average sales price of 2020. However, the five states that did not record the highest average sales prices of 2020 (CT, ME, PA, RI, SD, HI), all recorded average sales prices in July well above the 2020 year-to-date average. Momentum of home price appreciation differs by state, however, all states are still recording positive home price appreciation.

METROPOLITAN AREA DATA AND TRENDS

  • Summer buying season benefits majority of metros
  • 90% of largest metros seeing strongest appreciation of 2020

Across the 20-largest metro areas of the U.S., nearly all of them recorded the strongest month of price appreciation of 2020, in July. A total of 18 of the 20-largest CBSAs had a stronger annualized monthly increase in July than those recorded in prior months of 2020. The traditional strength on the spring has been pushed into summer as result of COVID-19. As such, positive market appreciation and absorption of supply continues across metro areas.

The month of July saw homes listed for sale going under contract at rates up to 60 percent higher in 2020 than 2019. In the Los Angeles market, we report the counts of homes transitioning from Listed to Under Contract is +57 percent higher in July 2020 than July 2019, and the number of closed sale transactions in July 2020 almost +40 percent higher than the same month of 2019. Moving to Under Contract is an excellent predictor or future closed sales. Similar market conditions in Under Contract status updates exist in other major markets; Houston (+52%), Miami (+43%), Dallas (+37%), San Francisco (+25%), and Atlanta (+25%).

ABOUT THE RADIAN HPI

Red Bell Real Estate, LLC (“Red Bell”), a subsidiary of Radian Group Inc., provides national and regional indices for download at info.radian.com/hpi, along with information on how to access the full library of indices.

Additional content on the housing market can also be found on the Radian Insights page located at https://radian.com/news-and-knowledge/insights.

Red Bell offers the Radian HPI data set along with a client access portal for content visualization and data extraction. The engine behind the Radian HPI has created more than 100,000 unique data series, which are updated on a monthly basis.

The Radian HPI Portal is a self-service data and visualization platform that contains a library of thousands of high-value indices based on both geographic dimensions as well as by market, or property attributes. The platform provides monthly updated access to nine different geographic dimensions, from the national level down to zip codes. In addition, the Radian HPI provides unique insights into market changes, conditions and strength across multiple property attributes, including bedroom count and livable square footage. To help enhance Red Bell’s customers’ understanding of granular real estate markets, this library is expanded regularly to include more insightful indices.

In addition to the services offered by its Red Bell subsidiary, Radian is ensuring the American dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, title, valuation, asset management and other real estate services. The company is powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk. Visit www.radian.com to see how Radian is shaping the future of mortgage and real estate services.

Contacts:

For Investors
John Damian – 215.231.1383
john.damian@radian.com

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