A real estate agent walks into a home for sale in Lancaster, Ohio.
Ty Wright | Bloomberg | Getty Images
Sales of previously owned homes rose 3.1% in January to 4 million units on a seasonally adjusted annual basis, according to the National Association of Realtors. Sales decreased by 1.7% year-on-year.
The count depends on closings, so contracts will likely be signed in November and December, when mortgage interest rates have retreated from their October high of 8%. By mid-December, interest rates had reached a recent low of around 6.6%. Today they are back over 7%, according to Mortgage News Daily.
“While home sales are still well below where they were two years ago, January's monthly gains are the beginning of more supply and demand,” said Lawrence Yun, chief economist at NAR. “Listings were modestly higher, and homebuyers are benefiting from lower mortgage rates than late last year.”
The inventory of homes for sale in January rose to 1.01 million units, up 3.1% from January 2023, but remains at a three-month low in supply. Six months is considered a balanced market between buyer and seller.
This dynamic is why the market continues to see pressure on home prices. The median existing home price for all housing types in January was $379,100, up 5.1% from a year earlier and an all-time high for January.
All four US regions saw price increases, with 16% of homes selling at above list price.
“Multiple offers are common on mid-priced homes, and many homes still sell within a month. The high share of all-cash deals — 32% — indicates a market full of multiple offers driven by record-high housing wealth,” Yoon said.
The 32% cash share is up from 29% in both December and January 2023. It is also the highest level in nearly a decade – since June 2014.
First-time buyers accounted for only 28% of sales. Historically, they make up about 40%, but it's the lack of homes for sale at low prices that is hurting them the most.
While lower mortgage interest rates helped boost January sales, today's higher interest rates are once again weighing on the market. A separate report from Redfin showed that new listings rose 10% year over year during the four weeks ending February 18, the largest increase in two months. However, signed contracts were down 7% from last year, according to the report.
Correction: The all-cash share of home sales in January 2024 rose 32% from 29% in January 2023. An earlier version of this story missed the comparison.
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