The U.S. housing market continued its cooling trend in January, with existing-home sales falling for the twelfth consecutive month and housing starts declining 4.5%. According to the latest report from the National Association of Realtors®, existing home sales fell 0.7% last month to a seasonally adjusted and annualized rate of 4.00 million units. The median existing-home sales price increased 1.3% from a year ago to $359,000.
Housing starts, which measure the annualized change in the number of new residential buildings that began construction, are reflective of the current housing dynamic. Housing starts fell 4.5% last month to an annual rate of 1.31 million units, according to new Commerce Department data released on Thursday. Refinitiv economists' forecast is for a pace of 1.35 million units, which is lower than anticipated.
At the conclusion of January, there were 980,000 housing units available, representing a 2.1% increase since December, and a 15.3% increase since the same time last year. In January, properties were typically on the market for 33 days, an increase from 26 days in December and 19 days in January of the previous year. 54% of homes sold in January were on the market for less than 30 days.
On Tuesday, Freddie Mac reported that the average rate on a 30-year fixed-rate mortgage had decreased from its peak, yet it was still 2 percentage points higher than it had been a year ago, at 6.32%. The average 15-year fixed-rate mortgage had a rate of 5.51%. The ultra-low level mortgage rates during the pandemic were significantly lower than the current numbers.
“We may have to wait another month or two to see what buyers are planning this year since new listings are currently trickling out at near-record low levels,” said Jill Oudil, chair of the national real estate board. As the temperature rises, however, this should shift.
Higher interest rates, put in place by the Federal Reserve with the intention of reducing inflation, have caused mortgage rates to increase, making home ownership inaccessible for many and creating a significant impact on the housing market. In January, first-time buyers accounted for 31% of sales, which is the same as December but an increase from 27% in January 2022. Distressed sales – foreclosures and short sales – represented 1% of sales in January, identical to last month and one year ago.
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
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