Existing-home sales drop in January
As home prices continue to rise, the housing inventory level for January is the lowest level since 1999.
Existing-home sales took a step back in January, continuing a fluctuating pattern of monthly increases and declines.
Total existing-home sales edged downward 1.3% to a seasonally-adjusted rate of 5.46 million, the National Association of Realtors reported. This includes completed transactions of single-family homes, townhomes, condominiums, and co-ops.
But for the second straight month, overall sales increased year-over-year and are up 9.6% from a rate of 4.98 million in January 2019.
Despite the slip in sales, NAR Chief Economist Lawrence Yun said the outlook for 2020 home sales is promising.
“The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales,” Yun noted.
Single-family home sales in January fell a little more than 1% to a seasonally-adjusted annual rate of 4.85 million from 4.91 million in December. Sales of single-family home are up 9.7% from a year ago, however.
The median existing single-family home price was $268,600 in January 2020, up 6.9% from January 2019.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 610,000 units in January, down 1.6% from December but 8.9% higher than a year ago. The median existing condo price was $248,100 in January, rising 5.7% from a year ago.
Total existing-home sales in the Northeast were flat at 730,000 in January while rising 7.4% from the previous year. The median price in the Northeast was $312,100, up 11.5% from January 2019.
Existing-home sales increased 2.4% in the Midwest to an annual rate of 1.29 million, which is up 8.4% from a year ago. The median price in the Midwest was $200,000, a 5.4% increase from last January.
In the South, sales inched up by 0.4% to an annual rate of 2.38 million in January, up 11.7% from a year ago. The median price in the South was $229,900, a 6.3% increase from this time last year.
Existing-home sales in the West fell 9.4% to an annual rate of 1.06 million in January, an 8.2% increase from a year ago. The median price in the West was $393,800, up 5.2% from January 2019.
The median existing-home price for all housing types in January was $266,300, up 6.8% from January 2019 and a price of $249,400. December’s price increase marks 95 straight months of year-over-year gains.
“Mortgage rates have helped with affordability, but it is supply conditions that are driving price growth,” Yun said.
At the end of January, total housing inventory sat at 1.42 million units and is up 2.2% from December but down 10.7% from one year ago and 1.59 million units.
The housing inventory level for January is the lowest level since 1999. Unsold inventory sits at a 3.1-month supply at the current sales pace, up from the 3.0-month figure recorded in December and down from the 3.8-month figure recorded in January 2019.
Properties remained on the market for about 43 days in January, seasonally up from 41 days in December, but down from 49 days in January 2019. About 42% of homes sold in January 2020 were on the market for less than a month.
First-time buyers were responsible for 32% of sales in January, up from 31% in December and up from 29% in January 2019.
“It is good to see first-time buyers slowly stepping into the market,” Yun said. “The rise in the homeownership rate among the younger adults, under 35, and minority households means an increasing number of Americans can build wealth by owning real estate. Still, in order to further expand opportunities, significantly more inventory and home construction are needed at the affordable price points.”
Freddie Mac reported that the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.62% in January, down from 3.72% in December. The commitment rate was 4.46% for the same period a year ago.
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