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Published: Jul 31, 2020 5 min read

Record low interest rates kept attracting home buyers into the housing market as low inventory pushed home prices up during the month of July.

The median home price surged 8.5% year-over-year, reaching an all-time high of $349,000, according to the latest data from Realtor.com. The increase comes in the middle of a pandemic that virtually shut the country down and led to the largest economic contraction in U.S. history.

"When the pandemic helped tip the U.S. economy into recession, most homeowners and home buyers braced for falling house prices," said Danielle Hale, Realtor.com's chief economist. "That's what happened in the last recession. But that's not what we're seeing in today's market."

Hale went on to point out that there was already a housing shortage to begin the year, with about a third less properties available on the market than last year. At the same time, homeowners who may have been thinking about selling put those plans on hold as COVID-19 lockdowns and fears of the virus spreading took over. Add record low mortgage rates to the mix and we have the perfect storm for home prices to rise.

"We have this market imbalance tipped pretty solidly in favor of sellers at this point," said Hale. "Yet many homeowners believe that now is still not a good time to sell."

Week in Review

There was both good and bad news for the housing market this week the economy continues to deal with a spike in COVID-19 infections.