Existing-home sales drop for 12th straight month

While some industry experts expected existing-home sales to rise for the first time in a year, that wasn’t the case.

The National Association of Realtors (NAR) reported this morning that existing-home sales fell for a 12th straight month in January 2023.

Total existing-home sales, including completed transactions for single-family homes, townhomes, condos, and co-ops, slipped by 0.7% to a seasonally adjusted rate of 4 million in January.

On a year-over-year basis, existing-home sales plunged 36.8% from 6.34 million in January 2022.

The good news, perhaps, is that the market could be reaching its low point.

“Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”

Single-family home sales declined to a seasonally adjusted annual rate of 3.59 million in January, down 0.8% from 3.62 million in December and 36.1% from one year ago. 

And prices continue to climb as many, including the National Association of Home Builders, point to housing affordability as a prime threat to housing

According to the NAR, the median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300). This marks 131 consecutive months of year-over-year increases, the longest-running streak on record.

The median existing single-family home price was $363,100 in January, up 0.7% from January 2022.

At the end of January, total housing inventory sat at 980,000 units, up 2.1% from December and 15.3% from one year ago (850,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.

“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun noted. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”

Properties remained on the market for 33 days in January, the NAR reported, up from 26 days in December and 19 days in January 2022. About 54% of homes sold in January were on the market for less than a month.

Here’s how existing-home sales performed on a regional basis:

• In the Northeast, existing-home sales retracted 3.8% from December to an annual rate of 500,000 in January, down 35.9% from January 2022. The median price in the Northeast was $383,000, up 0.3% from the previous year.
• In the Midwest, existing-home sales slid 5.0% from the previous month to an annual rate of 960,000 in January, declining 33.3% from one year ago. The median price in the Midwest was $252,300, up 2.7% from January 2022.
• Existing-home sales in the South rose 1.1% in January from December to an annual rate of 1.82 million, a 36.6% decrease from the prior year. The median price in the South was $332,500, an increase of 3.4% from one year ago.
• In the West, existing-home sales elevated 2.9% in January to an annual rate of 720,000, down 42.4% from the previous year. The median price in the West was $525,200, down 4.6% from January 2022.