According to the National Association of Realtors, existing-home sales declined in January, continuing a fluctuating pattern of monthly increases and declines.
Significant declines in the West region dragged down nationwide numbers, with the other three major U.S. regions reporting marginal or no changes last month.
Total existing-home sales (completed transactions that include single-family homes, townhomes, condominiums and co-ops) decreased 1.3% from December to a seasonally-adjusted annual rate of 5.46 million in January. However, for the second straight month, overall sales substantially increased year-over-year, up 9.6% from a year ago (4.98 million in January 2019).
“Existing-home sales are off to a strong start at 5.46 million,” says Lawrence Yun, NAR’s chief economist. “The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales.”
The median existing-home price for all housing types in January was $266,300, up 6.8% from January 2019 ($249,400), as prices increased in every region. December’s price increase marks 95 straight months of year-over-year gains.
Total housing inventory at the end of January totaled 1.42 million units, up 2.2% from December, but down 10.7% from one year ago (1.59 million). The housing inventory level for January is the lowest level since 1999. Unsold inventory sits at a 3.1-month supply at the current sales pace, up from the 3-month figure recorded in December and down from the 3.8-month figure recorded in January 2019.
Properties typically remained on the market for 43 days in January, seasonally up from 41 days in December, but down from 49 days in January 2019. Forty-two percent of homes sold in January 2020 were on the market for less than a month.
First-time buyers were responsible for 32% of sales in January, up from 31% in December and up from 29% in January 2019.
“It is good to see first-time buyers slowly stepping into the market,” Yun remarks. “The rise in the homeownership rate among the younger adults, under 35, and minority households means an increasing number of Americans can build wealth by owning real estate. Still, in order to further expand opportunities, significantly more inventory and home construction are needed at the affordable price points.”
Individual investors or second-home buyers, who account for many cash sales, purchased 17% of homes in January, equal to December 2019 and up slightly from 16% in January 2019. All-cash sales accounted for 21% of transactions in January, up from 20% in December but down from 23% in January 2019.
Distressed sales – foreclosures and short sales – represented 2% of sales in January, unchanged from December 2019 and down from January 2019.
For more insights from January, click here.