The National Association of Realtors says that existing-home sales grew 3.1% in January, but slipped 1.7% year-over-year.
“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” NAR Chief Economist Lawrence Yun said. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”
Total housing inventory at the end of January was 1.01 million units, up 2% from December and 3.1% from one year ago. Unsold inventory sits at a three-month supply at the current sales pace, down from 3.1 months in December but up from 2.9 months in January 2023.
NAR found the median existing-home price for all housing types in January was $379,100, an increase of 5.1% from one year ago.
“The median home price reached an all-time high for the month of January,” Yun said. “Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.”
While things looked good in January, the market is already taking a different turn. Just this week mortgage applications plummeted by more than 10% and mortgage rates crept back up to 7%.
"The nascent housing recovery may stall in February, as mortgage rates have picked up," First American Economist Odeta Kushi said. "A simple analysis based on the historical relationship between mortgage applications and existing-home sales indicates that existing-home sales should decline to 3.97 million seasonally adjusted annualized sales (SAAR). But if long-term rates start falling again (as expected this year), we should see a pick up in activity."
According to NAR, first-time buyers accounted for 28% of January sales, down slightly from the previous month and year.
In terms of regional performance, existing-home sales surged in the Midwest, South, and West, while remaining steady in the Northeast. The Northeast experienced a decline in sales compared to January 2023, while the Midwest, South, and West saw varying degrees of growth.
