The fear of imminent foreclosure brought more listings to the housing market’s lowest price tier in the second quarter, a report from Redfin found.
The number of active for-sale properties in the most affordable band — those with a median price of $108,000 — rose 11.3% year-over-year. Comparatively, the luxury tier — median price of $1.03 million — came next at a 1.3% annual gain in supply. Affordable homes — those with a $198,200 median — rose 0.7%, while expensive homes at a $455,000 median fell 5.4% and mid-priced homes — $290,000 — dropped 7.1%.
"The government's pandemic mortgage forbearance program is coming to an end, which is likely boosting the supply of America's most affordable homes," Fairweather said. "Some homeowners are putting their properties on the market because they're concerned about being foreclosed upon when forbearance dries up, while other owners of affordable homes are selling because they want to avoid the increase in seller competition that's likely to occur when forbearance ends."
The most affordable and luxury tiers also saw the greatest annual increase in values and homes sold. Luxury tier prices shot up 25.8% with sales jumping 88.2% while the most affordable home prices and sales surged 18.7% and 56.8%, respectively. Home equity gains sharply increased during the pandemic, particularly at the top end of the market.
Meanwhile, investors bought more single-family homes than ever before in the second quarter and now own 15.9% of all U.S. properties. It’s especially prevalent at the bottom of the market, where investors took up the largest share of purchases.
"Surging prices can be especially problematic for first-time and lower-income homebuyers,” Fairweather said. "With the pandemic eviction moratorium coming to an end and many Americans priced out of homeownership, investors are keen on buying up inexpensive properties and turning them into rentals."
