January’s sales of existing homes were down 1.3 percent from December, according to a recent report from the National Association of Realtors. But year over year, existing-home sales were up 9.6 percent, marking the second straight month of year-over-year increases and pointing to an overall positive pattern.
“Existing-home sales are off to a strong start at 5.46 million,” said NAR Chief Economist Lawrence Yun in a press release accompanying the data. “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales.”
Median prices for all housing types in January were up 6.8 percent year over year to $249,400, while total housing inventory was down 10.7 percent year over year, the lowest level since 1999. Unsold inventory is currently sitting at a 3.1-month supply. A year ago, there was a 3.8-month supply of inventory in the U.S.
“Mortgage rates have helped with affordability, but it is supply conditions that are driving price growth,” Yun said.
Not surprisingly, market time was down year over year. Homes were listed an average of 43 days last month as compared to 49 days in January 2019.
Significant home sales declines in the West — down 9.4 percent from December 2019 — were responsible for the dip in the nationwide numbers, but in the South, existing home sales grew 0.4 percent in January, posting an 11.7 percent increase year over year.
Across the country, the good news is that first-time home buyers are gradually coming back. They represented 32 percent of existing-home sales in January, up from 31 percent in December and from 29 percent in this time last year.
“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.”