Existing-home sales – including sales of single-family homes, condos and co-ops – were at a seasonally adjusted annual rate of 5.38 million in January, down 3.2% from a downwardly revised 5.56 million in December and down 4.8% compared with January 2017, according to the National Association of Realtors (NAR).
It was the second consecutive month that existing home sales fell on a year-over-year basis. What’s more, it was largest decline on an annual basis since August 2014.
Regionally, existing-home sales fell 1.4% in the Northeast; 6.0% in the Midwest; 1.3% in the South; and 5.0% in the West.
As has been the case for more than a year now, the main culprit is lack of supply.
“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” says Lawrence Yun, chief economist for NAR, in a statement. “While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
The average price for a home in January (all housing types) was $240,500, up 5.8% from $227,300 in January 2017.
January’s price increase marks the 71st straight month of year-over-year gains.
As of the end of January, here were about 1.52 million existing homes available for sale, about a 3.4-month supply at the current sales pace.
That’s 9.5% less inventory than a year ago, when there was 1.68 million existing homes for sale.
Inventory has now fallen year-over-year for 32 consecutive months, NAR says.
About 29% of existing home sales in January were to first-time home buyers, down from 32% in December and down from 33% a year earlier.
Meanwhile, mortgage rates are on the rise.