According to the National Association of Realtors (NAR), existing operating sales fell in January as high mortgage rates and rising home prices continued to squeeze buyers. Existing home sales fell 4.9% in January to a seasonally adjusted 408 million rate.
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According to the National Association of Realtors (NAR), existing operating sales fell in January as high mortgage rates and rising home prices continued to squeeze buyers.
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Existing home sales fell 4.9% in January to a seasonally adjusted 408 million rate. Despite a decline a few months ago, sales were 2% higher than a year ago, bringing the fourth consecutive month of growth per year.
NAR Chief Economist Lawrence Yun pointed out mortgage rates as a key factor in the slowdown.
Lawrence Yun | NAR Chief Economist
“Mortgage fees refused to be upset for months despite multiple short-term interest rate cuts by the Federal Reserve,” Yun said. “Combined with rising home prices, affordability for homes is a major challenge.”
According to Freddie Mac, as of February 20, the average 30-year fixed-rate mortgage was 6.85%.
At the current sales pace, supply of unsold home inventory rose to 3.5 months from 3.2 months in December and 3 months in January 2024. According to the monthly real estate agent’s trust index, the property remained in the market for around 41 days. January compared to the 36th of the previous year.
“More housing supply allows qualified buyers to enter the market,” Yun pointed out. “But for many consumers, both an increase in inventory and a lower mortgage rate are necessary to buy another home or become a first-time homeowner.”
In January, median existing home prices rose in all four US regions, rising 4.8% year-on-year to $396,900.
While home prices were rising, sales slipped in three of the four US regions and remained flat in the Midwest. Sales increased in three regions each year, and remained unchanged in the South.
Northeast: From December to January, sales fell from 5.7% to 500,000, up 4.2% from the previous year. The median price rose 9.5% to $475,400, an increase of 9.5% from the previous year. Midwest: January sales remained unchanged at 1 million, but increased by 5.3% from January 2024. The median price rose 7.2% to $290,400, up 7.2% from the previous year. Minami: Sales fell 6.2% from December and remained unchanged from the previous year. The median price rose 3.5% to $356,300, up 3.5% from January 2024. Nishi: Existing home sales fell 7.4% in January to 750,000, up 1.4% from a year ago. The median price jumped to $614,200, up 7.4% from the previous year. Starting in January 2024.
Despite the recent decline in sales, some experts are anticipating a spring rebound, especially in the Sunbelt market.
Odeta Kushi | First American Financial Corp. Deputy Chief Economist
“The new resilience in the housing market is due to high inventory levels and 17% and 4% increase in active and new inventory respectively for a year ago.”
“Inventory is expected to continue to be a higher trend, potentially giving buyers more options and negotiation power. A market with newer home construction and inventory is affordable. We find easing and sales increase. This is a common condition in the Sun Belt market.”
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