Sales of existing homes in the US tumbled 0.7% in January from the prior month to an annual rate of 4 million units, according to the National Association of Realtors (NAR). On an annual basis, existing home sales are down 36.9% compared with January 2021. The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2021 ($354,300), as prices climbed in three out of four US regions while falling in the West. For 131 consecutive months, there have been year-over-year increases, setting a record for the longest-running streak.
NAR Chief Economist Lawrence Yun commented: “Home sales are bottoming out. Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines. Inventory remains low, but buyers are beginning to have better negotiating power. Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
The annualized change in the number of new residential buildings that began construction is reflected in the current housing dynamic through housing starts. According to data from the Commerce Department, housing starts dropped by 4.5% in the past month, amounting to an annual rate of 1.31 million units. In January, the number of single-family housing starts decreased by 4.3% from the adjusted December total.
At the close of January, the total number of housing units was 980,000, a 2.1% increase from the prior month and a 15.3% rise compared to the same time last In January, the average home stayed listed for 33 days, a dramatic increase from the 19 days of the previous year.
The mortgage rates have increased recently due to the increase in rates. The US 10 year yield has risen to 3.938%, the highest level since November 2022. The Federal Reserve’s fight against inflation has put upward pressure on mortgage rates.
The Canadian housing market has been under increasing pressure with home prices dropping for 11 months in a row due to rising interest rates, making it harder for potential purchasers to secure the funds for a purchase. The Canadian Real Estate Association reported that Canadian home sales had the worst January since 2009, dropping three per cent from the previous month.
0. “US: Existing Home Sales decline by 0.7% in January vs +0.1% expected” FXStreet, 21 Feb. 2023, https://www.fxstreet.com/news/us-existing-home-sales-decline-by-07-in-january-vs-01-expected-202302211507
1. “Existing-Home Sales Descended 0.7% in January” National Association of Realtors, 21 Feb. 2023, https://www.nar.realtor/newsroom/existing-home-sales-descended-0-7-in-january
2. “Existing home sales unexpectedly fall in January for 12th straight month” Fox Business, 21 Feb. 2023, https://www.foxbusiness.com/economy/existing-home-sales-unexpectedly-fall-january-straight-month
3. “Existing-home sales down nearly 37% from a year ago” Washington Examiner, 21 Feb. 2023, https://www.washingtonexaminer.com/policy/economy/existing-home-sales-down-37-percent
4. “US January existing home sales 4.00M versus 4.10M estimate” ForexLive, 21 Feb. 2023, https://www.forexlive.com/news/us-january-existing-home-sales-400m-versus-410m-estimate-20230221
5. “Existing home sales fell for the 12th straight month in January, lowest since 2010” MarketWatch, 21 Feb. 2023, https://www.marketwatch.com/story/existing-home-sales-fall-for-the-12th-straight-month-in-january-lowest-since-2010-17a703ba
6. “Home Sales Continue to Slow” Barron's, 21 Feb. 2023, https://www.barrons.com/articles/home-sales-continue-to-slow-but-the-bottom-could-be-near-bf6ec11a