NAR Chief Economist Predicts Existing Home Sales Are Likely at Cyclical Low, Will Rebound
Existing home sales fell slightly for the third straight month in January, according to the National Association of Realtors (NAR). Of the four major U.S. regions, only the Northeast saw an increase last month.
Total existing-home sales–completed transactions that include single-family homes, townhomes, condominiums and co-ops–fell 1.2% from December to a seasonally adjusted annual rate of 4.94 million. Sales are now down 8.5% from a year ago (5.40 million in January 2018).
The forecasts ranged from a low of 4,900,000 million to 5,100,000 million, with a consensus looking for 5,040,000 million.
“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,” Lawrence Yun, NAR’s chief economist said. “Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”
The median existing-home price for all housing types in January was $247,500, a gain of 2.8% from January 2018 ($240,800). The month of January marks price increases for the 83rd straight month of year-over-year gains.
Mr. Yun noted that median home price growth is the slowest since February 2012.
“Lower mortgage rates from December 2018 had little impact on January sales, however, the lower rates will inevitably lead to more home sales.”
Total housing inventory at the end of the month rose to 1.59 million, up from 1.53 million existing homes available for sale in December. That represents an increase from 1.52 million a year ago.
Unsold inventory is at a 3.9-month supply at the current sales pace, up from 3.7 months in December and from 3.4 months in January 2018.
Properties remained on the market for an average of 49 days in January, up from 46 days in December and 42 days a year ago. Thirty-eight percent (38%) of homes sold in January were on the market for less than a month.