Existing Home Sales Rebounded In January

Existing-home sales rebounded from a December plummet in January, increasing month-over-month, but not annually.

Sales increased by 3.1% to a seasonally adjusted annual rate of 4.00 million, according to the latest data from the National Association of Realtors. They were down 1.7% from the same time last year, however.

The Midwest, West, and South all saw sales increase, while the Northeast held steady but didn’t decline.

This is a turnaround from December, which saw existing sales shrink to their lowest point since 1995.

“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”

Rates descended to the mid-6%s  starting in December, giving buyers some much-needed breathing room and boosting mortgage applications. NAR’s data is based on closings, meaning its count includes contracts signed in the last two months of 2023.

But the median price for an existing home rose again, up 5.1% YOY to $379,100, the seventh consecutive month of growth and the highest on record.

“Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth,” Yun noted.

Yun previously labeled the current rate of price appreciation as “unsustainable.”

“If price increases continue at the current pace, the country could accelerate into haves and have-nots. Creating a path towards homeownership for today’s renters is essential,” he said.

Stock shortages continue to strain the market and prevent buyers from finding their dream home. The inventory of unsold homes slipped slightly to a 3-month supply at the current rate, just slightly higher than January 2023, which registered a 2.9-month supply.

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