Sales of existing U.S. homes stalled in January as inventory lagged behind demand, according to the National Association of Realtors, but both sales and prices are up strongly from the previous year.
Total sales – including existing single-family homes, townhomes, condominiums and co-ops – rose just 0.4 percent in January to a seasonally adjusted annual rate of 4.92 million from a downwardly revised 4.90 million in December. Compared to January 2011, sales are up 9.1 percent.
Home prices fell to a national median of $173,600 in January from $180,300 in December, but the new price is still up 12.3 percent from the year before. This market the 11th straight month of year-over-year price gains, a feat not accomplished since the height of the housing boom.
“Buyer traffic is continuing to pick up, while seller traffic is holding steady,” said NAR chief economist Lawrence Yun in a news release. “In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”
“We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth.”
Total existing home inventory fell 4.9 percent in January to 1.74 million homes for sale, a 4.2-month supply at the current sales pace. In December there was a 4.5-month supply and a 6 month supply is considered a balanced market between buyer and seller demand.
Low interest rates are also helping to maintain the attractiveness of homebuying. The average rate on a 30-year fixed rate loan in January was 3.41 percent, up from December’s 3.35, but still very near all-time lows.
First-time home buyers continue to make-up about a third of all sales. In January 30 percent of all purchases were by first-timer unchanged from December and down from 33 percent a year earlier.