Home sales off to a good start
Existing home sales rose in January to the fastest pace in nearly a decade, according to the National Association of Realtors, with all regions gaining except for the Midwest.
Completed transactions rose 3.3 in January to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. The pace is up 3.8 percent from a year ago, the strongest seen since February 2007. Those are pre-crash numbers, you guys!
Dr. Lawrence Yun, NAR Chief Economist, says the gains signal consumer resilience despite rising interest rates.
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” he said.
“Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions,” noted Dr. Yun.
Home prices continue to rise
The median existing home price in January rose 7.1 percent over the year to $228,900. This period’s increase marks the most rapid since last January, and represents the 59th consecutive month of year-over-year gains.
Inventory is 7.1 percent lower than a year ago, but actually rose in January by 2.4 percent – welcome news for the homebuyers that have been benched by tight inventory levels (that combined with rising prices, creates affordability problems).Nationally, properties averaged 50 days on the market, down 14 days a year ago. Click To Tweet
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” added Dr. Yun. NAR’s research indicates that combining tight inventory levels with rising interest rates led to households in over half of all states last months being able to afford less.
Another challenge for buyers in coming months
NAR President William E. Brown, cautions about another source that could possibly drag down inventory for would-be buyers in coming months.
“Supply and demand imbalances continue to be burdensome in many markets, and now Fannie Mae is supporting a Wall Street firm’s investment in single-family rentals,” he said.
“This will only further hamper tight supply and put major investors in direct competition with traditional buyers. Instead, the GSEs should lower overly burdensome fees and help qualified borrowers become homeowners.”
All regions but the Midwest saw more sales
Home sales in the Northeast jumped 5.3 percent to an annual rate of 800,000, and are now 6.7 percent above a year ago. The median price in the Northeast was $253,800, which is 2.5 percent above January 2016.
In the Midwest, existing-home sales decreased 1.5 percent to an annual rate of 1.29 million in January, and are 0.8 percent below a year ago. The median price in the Midwest was $174,900, up 6.5 percent from a year ago.
Existing-home sales in the South in January rose 3.6 percent to an annual rate of 2.31 million, and are now 3.1 percent above January 2016. The median price in the South was $201,400, up 9.2 percent from a year ago.
Existing-home sales in the West ascended 6.6 percent to an annual rate of 1.29 million in January, and are now 8.4 percent above a year ago. The median price in the West was $332,300, up 6.8 percent from January 2016.