Record-low interest rates and a record-high number of home seekers are fueling demand.

Zillow said sellers expanded their advantage this summer as market forces continued to work in their favor. Buyers outnumbered sellers and snapped up homes at a record pace in July, Zillow reported. “This spring’s housing soft patch is receding in the rearview mirror as we get a clear picture of robust demand meeting remarkably low supply,” said Zillow Economist Jeff Tucker. “Record-low interest rates and a record-high number of people in their early 30s are combining to fuel first-time buyer demand.” Recently, the Mortgage Bankers Association upped its 2020 originations forecast to $2.986 trillion. MBA now expects purchase market originations to hit $1.34 trillion in 2020, the highest level since 2006. The forecast calls for refinance originations to reach 1.646 trillion. Tucker said home builders are racing to meet demand, but supply remains well behind what’s needed. “This lack of inventory, along with forbearance terms keeping unemployed homeowners in their homes, stands in stark contrast to the Great Recession, when excess supply and distressed sales brought down home values,” he said. Zillow said the for-sale housing market is “red hot” despite enormous job losses across the country. Home values have climbed steadily as a result. The typical home value was $253,527 in July, a 4.5 percent year-over-year increase–the fastest pace of growth since May 2019. Homes sold in July typically went under contract after 16 days, two days faster than the previous monthly low in Zillow data that dates back to January 2018. Month-over-month home value growth jumped from 0.4 percent in June to 0.48 percent in July, the biggest one-month acceleration since 2012.

Source: Zillow