According to research data released in mid-August 2020 that was analyzed and published by ForexSchoolOnline.com, US home prices rose by 8.1% YoY between August 2019 and July 2020. From January to July 2020, the monthly annualized increase rate was 7.8%.
During the second quarter of 2020, housing demand increased from -41% all the way to +40% YoY. The annualized rate of increase for this period was 6.6%.
11% Drop in New House Listings, 36% Drop in Total Inventory
In the UK, housing prices rose 2% in August 2020 following massive losses during lockdown. This was the highest increase on record since February 2004 when prices rose 2.7%. As a result of the uptrend, the annual growth rate in house prices went from 1.5% in July to 3.7% in August 2020 according to The Nationwide. Notably, the biggest housebuilder in the UK reported a drop of -46% YTD in pre-tax profit as of June 30, 2020. During the same period, it had a -29% drop in completed houses YoY.
For the first time in the US, the national median home price surpassed the $300,000 mark in Q3 2020 according to Realtor.com. In July 2020, the new median price peak was set to $304,100, 12% higher than the previous peak reported over a decade before. This was an 8.5% increase from the June 2020 median price of $280,400.
A drop in mortgage rates was among the reasons cited for the growth. According to Marketwatch, 30-year fixed mortgage rates dropped to 2.98% in June 2020. There was also a shortage of inventory. Realtor.com revealed that new listings had dropped -11% YoY while total inventory had dropped -36% YoY. Moreover, households earning less than $35,000 a year were the hardest hit by lost wages. But as the National Association of Realtors shows, the median income for house buyers is $93,000 per year.