Existing Home Sales Fall for 12th Straight Month, New Home Sales Rise in January
By Nationally, existing-home sales fell for the 12th straight month in January, according to the National Association of Realtors®.[0] Sales from month to month were varied among the four major U.S. regions, with the South and West recording increases and the East and Midwest registering drops.[1] Year-over-year, every region saw a decrease.[1] The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300).[2] This is a record-breaking streak of 131 months of year-over-year increases.[1]
On Friday, the US Census Bureau and the Department of Housing and Urban Development released data that showed a 7.2% increase in the sales of new single-family houses for the month of January. This adjusted annual rate stands at 670,000.[3] January saw new home sales continuing to rise after a long period of decline, reaching more than 600,000 units for two months in a row.[4]
“Home sales are bottoming out,” NAR Chief Economist Lawrence Yun said in a statement.[5] “Inventory remains low, but buyers are beginning to have better negotiating power. Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”[5]
The typical home sold last month was on the market for 51 days—the highest level since February 2020.[6] In January 2022, that had increased to 27 days.[7] The length of time it is taking for homes to be sold has increased due to the decrease in potential buyers.[7] In January, 42.1% of offers written by Redfin agents were in a bidding war, the lowest rate since April 2020.[7] The percentage decreased from 43.1% in the last month and 68% in the last year.[7]
By the end of January, there were an estimated 439,000 single-family homes on the market, amounting to a 7.9 month supply at the current rate of sales.[8] This is down from an 8.7 month supply in December but 39 percent higher than the 5,7 month inventory a year earlier.[4]
Last week, applications for home purchases fell to a 25-year low as mortgage rates rose, due to the belief that the Federal Reserve will have to increase rates in order to counter inflation.[7] The 30-year-fixed mortgage rate has risen to an average of 6.5%, up from 6.27% in January and 3% prior to that.[9]
0. “Houses are staying on the market longer as home sales cool” MLive.com, 25 Feb. 2023, https://www.mlive.com/public-interest/2023/02/houses-are-staying-on-the-market-longer-as-home-sales-cool.html
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. “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
3. “US: New Home Sales rise by 7.2% in January vs 2.5% expected” FXStreet, 24 Feb. 2023, https://www.fxstreet.com/news/us-new-home-sales-rise-by-72-in-january-vs-25-expected-202302241539
4. “New Home Sales Hit 10-Month High, Despite Some Regional Decline” Mortgage News Daily, 24 Feb. 2023, https://www.mortgagenewsdaily.com/news/02242023-new-home-sales
5. “Home sales sank in January for the 12th straight month” KTVZ, 21 Feb. 2023, https://ktvz.com/money/cnn-business-consumer/2023/02/21/home-sales-sank-in-january-for-the-12th-straight-month/
6. “Homes in the U.S. Are Taking Longer to Sell Now Than at Any Point During the Peak of the Pandemic” Mansion Global, 24 Feb. 2023, https://www.mansionglobal.com/articles/homes-in-the-u-s-are-taking-longer-to-sell-now-than-at-any-point-during-the-peak-of-the-pandemic-cc497fb0
7. “High Housing Costs, Low Supply Hamper Market Recovery In January” Forbes, 25 Feb. 2023, https://www.forbes.com/sites/brendarichardson/2023/02/25/high-housing-costs-low-supply-hamper-market-recovery-in-january
8. “U.S. new home beat expectations in January, gold price edges up from daily lows” Kitco NEWS, 24 Feb. 2023, https://www.kitco.com/news/2023-02-24/U-S-new-home-beat-expectations-in-January-gold-price-edges-up-from-daily-lows.html
9. “East Texas experts discuss reasons home sales dropped for 12th straight month” KTRE, 23 Feb. 2023, https://www.ktre.com/2023/02/23/east-texas-realtors-explain-reason-home-sales-dropped-12th-straight-month
