January Existing Home Sales Up Sharply, Prices Too

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The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in January rose 3.3% to a seasonally adjusted annual rate of 5.69 million from an upwardly revised total of 5.51 million in December.

The consensus estimate called for sales to reach 5.575 million, according to a survey of economists polled by Bloomberg. Total sales in 2016 came in at 5.45 million to surpass 2015’s total of 5.25 million as the most sales since 2006 when 6.48 million homes were sold.

The NAR’s chief economist, Lawrence Yun, said:

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. 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.

Housing inventory increased by 2.4% in January to 1.69 million homes, equal to a supply of just 3.6 months, unchanged month over month, and equal to the lowest since NAR began tracking the supply of housing in 1999. Inventory has declined year over year for 20 consecutive months and is currently down 7.1% from 1.82 million in January 2016.

According to the NAR, the national median existing home price for all housing types in January was $228,900, up 7.1% compared with January 2016, the 59th consecutive month of rising home prices. In December the national median price was also $232,300.

The percentage of first-time buyers rose one point month over month to 33% in January, and also up one point from 32% in January of 2016. For all of 2016, first-time buyers accounted for 35% of sales.

Sales of single-family homes rose 2.6% from the December total of 4.91 million to a seasonally adjusted annual rate of 5.04 million, and it is up 3.7% compared with January 2016. Sales of multifamily homes jumped 8.3% in January to a seasonally adjusted annual rate of 650,000 units.

All homes were on the market for an average of 50 days in January, down from 52 days in December and from 64 days in January 2016. Foreclosed and nondistressed homes were on the market for an average of 51 and 49 days, respectively, and short sales took a median of 108 days to sell.

The NAR also reported the following regional data.

January existing-home sales in the Northeast rose 5.3% year over year to an annual rate of 800,000, up 6.7% compared with January 2016. The median price in the Northeast was $253,800, up 2.5% compared with last January.

In the Midwest, existing-home sales decreased by 1.5% to an annual rate of 1.29 million in January and are now 0.8% lower than January 2016 sales. The median price in the Midwest was $174,900, up 6.5% from a year ago.

Existing-home sales in the South rose 3.6% in January to an annual rate of 2.31 million and are 3.1% higher than January 2016 sales. The median price in the South was $201,400, up 9.2% from a year ago.

Existing-home sales in the West jumped 6.6% to an annual rate of 1.29 million in January and have moved 8.4% above January 2016 totals. The median price in the West was $332,300, up 6.8% compared with the January 2016 median.