Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 3.3% to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. January’s sales pace is 3.8% higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).
Single-family home sales grew 2.6% to a seasonally adjusted annual rate of 5.04 million in January from 4.91 million in December 2016 and are now 3.7% above the 4.86 million pace of a year ago. The median existing single-family home price was $230,400 in January, up 7.3% from January 2016.
Existing condominium and co-op sales jumped 8.3% to a seasonally adjusted annual rate of 650,000 units in January and are now 4.8% higher than a year ago. The median existing condo price was $217,400 in January, up 6.2% from a year ago.
January existing-home sales in the Northeast jumped 5.3% to an annual rate of 800,000 and are now 6.7% above a year ago. The median price in the Northeast was $253,800, a 2.5% gain from January 2016. In the Midwest, existing-home sales decreased 1.5% to an annual rate of 1.29 million in January, 0.8% below a year earlier. The median price in the Midwest was $174,900, up 6.5% from a year ago. Existing-home sales in the South in January rose 3.6% to an annual rate of 2.31 million and are now 3.1% above January 2016. The median price in the South was $201,400, up 9.2% from a year ago. Existing-home sales in the West climbed 6.6% to an annual rate of 1.29 million in January and are now 8.4% ahead of a year ago. The median price in the West was $332,300, up 6.8% from January 2016.
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” said Lawrence Yun, NAR chief economist. “Market challenges remain, but the housing market is off to a prosperous start as home buyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”
The median existing-home price for all housing types in January was $228,900, up 7.1% from January 2016 ($213,700). January’s price increase was the fastest since last January (8.1%) and marks the 59th consecutive month of year-over-year gains.
Total housing inventory at the end of January rose 2.4% to 1.69 million existing homes available for sale, but is still 7.1% lower than a year ago (1.82 million) and has fallen year-over-year for 20 straight months. Unsold inventory is at a 3.6-month supply at the current sales pace (unchanged from December 2016).
Properties typically stayed on the market for 50 days in January, down from 52 days in December and considerably more a year ago (64 days). Short sales were on the market the longest at a median of 108 days in January, while foreclosures sold in 51 days and non-distressed homes took 49 days. 38% of homes sold in January were on the market for less than a month.
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” added Yun. “NAR and realtor.com’s new ongoing research – the Realtors® Affordability Distribution Curve and Score – revealed that the combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.”
Inventory data from realtor.com® reveals that the metropolitan statistical areas where listings stayed on the market the shortest amount of time in January were San Jose-Sunnyvale-Santa Clara, Calif., 43 days; San Francisco-Oakland-Hayward, Calif., 47 days; San Diego-Carlsbad, Calif., 55 days; Seattle-Tacoma-Bellevue, Wash., 57 days; and Nashville-Davidson-Murfreesboro-Franklin, Tenn., Vallejo-Fairfield, Calif., and Greeley, Colo., all at 58 days.
“Supply and demand imbalances continue to be burdensome in many markets, and now Fannie Mae is supporting a Wall Street firm’s investment in single-family rentals,” said NAR President William E. Brown, a Realtor from Alamo, California. “This will only further hamper tight supply and put major investors in direct competition with traditional buyers. Instead, the GSEs should lower overly burdensome fees and help qualified borrowers become homeowners.”
First-time buyers accounted for 33% of sales in January, up from 32% in December and a year ago. NAR’s 2016 Profile of Home Buyers and Sellers – released in late 2016 – revealed that the annual share of first-time buyers was 35%.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased slightly in January to 4.15% from 4.20% in December. The average commitment rate for all of 2016 was 3.65%.
All-cash sales were 23% of transactions in January, up from 21% in December but down from 26% a year earlier. Individual investors, who account for many cash sales, purchased 15% of homes in January, unchanged from December and down from 17% a year ago. 59% of investors paid in cash in January.
Distressed sales – foreclosures and short sales – comprises 7% of sales in January, unchanged from December and down from 9% a year earlier. 5% of January sales were foreclosures and 2% were short sales. Foreclosures sold for an average discount of 14% below market value in January (20 percent in December), while short sales were discounted 10% (unchanged from December).