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Existing-home sales accelerated in January as home buyers shrugged off rising home prices—which surged to an all-time high—and took advantage of lower mortgage rates and moderately higher inventory, according to the National Association of REALTORS®.
NAR’s latest existing-home sales data, which reflects completed transactions for single-family homes, townhomes, condos and co-ops, jumped 3.1% month over month in January. Still, sales are down 1.7% compared to a year earlier.
“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” says NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”
Although there were 2% more homes on the market in January than December, sales remain at a current three-month supply. Home buyers continue to face stiff competition during a historic housing shortage. Here are more highlights from NAR’s latest existing-home sales report, reflecting January data:
- Home prices are surging. The median existing-home price was $379,100—a 5.1% jump from a year ago. All major regions of the U.S. recorded price increases. Broken out by housing type, the median price of a single-family home sold in January was $383,500, up 5% from a year earlier. The median price for a condo was $339,400, jumping 5.7% year over year.
- Competition is still fierce. “Multiple offers are common on mid-priced homes, and many homes were still sold within a month,” Yun says. Further, he notes, “the elevated share of cash deals—32%—indicated a market full of multiple offers and propelled by record-high housing wealth.”
- More inventory but still not enough. Total inventory for existing homes was 1.01 million units, up 3.1% from a year ago. But housing stock remains lean nationwide. “More listings will help Americans move,” says NAR President Kevin Sears, adding that the association has been advocating for the More Homes on the Market Act, which would lower the tax hit on home sales and encourage more inventory.
- Listings linger a little longer. Properties typically remained on the market for 36 days, up from 29 days in December and 33 days from a year earlier.
- First-time buyers are struggling. First-time buyers comprised 28% of sales, down from 31% a year earlier. “There is still strong demand, as the large millennial population remains in the prime first-time homebuying range,” says Lisa Sturtevant, chief economist for Bright MLS. “However, many are being shut out of the market due to rising home prices and elevated mortgage rates. The wealth gap in the U.S., which is already very high, will widen as existing homeowners and higher-income households are able to enter into homeownership while lower-income and prospective first-time and first-generation households are increasingly going to be left out.”
Regional Outlook
The Midwest, South and West saw sales gains in January while sales held steady in the Northeast, according to NAR’s report. Here’s a closer look at how existing-home sales performed:
- Northeast: Sales were unchanged, at 480,000 units, but were down 5.9% compared to a year earlier. Median price: $434,300, jumping 10.1% from the prior year.
- Midwest: Sales rose 2.2% compared to December, reaching an annual rate of 950,000. Sales were down 3.1% from a year ago. Median price: $271,700, up 7.6% year over year.
- South: Sales climbed 4% from December, settling at an annual rate of 1.84 million. Sales fell 1.6% compared to the previous year. Median price: $345,100, up 4.1% from a year ago.
- West: Sales increased 4.3% month over month, reaching an annual rate of 730,000. Sales rose 2.8% from a year earlier. Median price: $572,100, up 6.3% year over year.
