The median sale price of U.S. luxury homes jumped 25.8% year over year in the second quarter, while the median sale price of the country's most affordable homes rose 18.7%, according to Redfin.
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By comparison, prices of mid-priced and affordable homes grew just 16% and 13.2%, respectively.
Purchases of luxury homes in the U.S. surged 88.2% year over year in the second quarter, while purchases of the most affordable homes rose 56.8%. By comparison, purchases of homes in other price tiers increased between 30% and 45%.
Home sales have soared across the board during the pandemic as Americans have taken advantage of low mortgage rates and the flexibility to work from anywhere.
But sales in the luxury and most affordable price tiers have seen especially large increases. For luxury homes, that's partly because affluent Americans have reaped the gains of a strong stock market and swelling savings accounts.
For the most affordable homes, it's likely due in part to a rebound in investor activity. Home purchases by real estate investors who commonly buy lower-priced properties jumped to a record high in the second quarter.
The number of homes for sale in the most affordable price tier rose 11.3% year over year during the second quarter. The next-biggest increase was in the luxury tier, which saw supply grow 1.3%. Supply in the remaining three tiers either declined or grew less than 1%.
Historically, luxury homes have taken much longer to sell than homes in other price tiers, but the gap has narrowed during the pandemic—likely due to increased competition for high-end homes that offer space and privacy.
The typical luxury home that was for sale in the second quarter spent 30 days on the market—34 fewer days than the same period in 2020. The most affordable homes spent 25 days on the market, 17 fewer days than a year earlier. Homes in the remaining three price tiers spent about two weeks on the market and also sold faster than they did in 2020. ■