Existing-home sales dropped for the twelfth straight month in January, down .07% from December and 36.9% YOY, though the declines are milder than in previous months.
Sales fell to a seasonally adjusted annual rate of 4.02 million from 4.00 million the month prior, according to the latest data from the National Association of Realtors. The South and West saw increased sales month-over-month, while the East and Midwest experienced declines.
All four regions saw annual declines.
“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,” said NAR Chief Economist Lawrence Yun.
“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.”
As rates moderate some, buyers are gaining the upper hand when it comes to the home buying process. Affordability remains an issue, but those who have waited out last year’s frenzy and have enough money to cover higher monthly payments can now get concessions from sellers and take their time choosing their dream home.
Timing is key, however.
While rates have edged down from above 7%, they remain volatile. After slipping close to 6% in previous weeks—resulting in sub-5% lock-ins for some borrowers—the average 30-year fixed-rate mortgage ticked up again to 6.32% last week.
Inventory remains a problem as well, though the inventory of unsold homes rose 2.1% from December to 980,000. This is a 2.9-month supply at the current sales pace, unchanged from the month prior but up from 1.7 months in December 2021. Zillow says the spring shopping season will be competitive, if not crazy, this year, in part thanks to stock shortages.
While appreciation is moderating, prices still rose in all regions. The median price for an existing home was $359,000, an increase of 1.3% YOY but down slightly from last month. This is the 131th consecutive month of YOY price increases, the longest streak on record.
The typical home stayed on the market for 33 days in December, up from 26 in December, while 54% of homes sold were on the market for less than a month.
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