Existing-home sales rise again in January

Existing-home sales in January increased for a second consecutive month, the National Association of Realtors reported.

Total existing-home sales, including completed transactions of single-family homes, townhomes, condos, and co-ops, edged upward by 0.6% to a seasonally adjusted rate of 6.69 million units in January compared to December 2020.

Sales also jumped 23.7% on a year-over-year basis compared to 5.41 million units in January 2020.

Single-family home sales rose at a seasonally-adjusted annual rate of 5.93 million in January, up 0.2% from 5.92 million in December, and up 23% from one year ago. The median existing single-family home price was $308,300 in January, soaring 14.8% from January 2020.

“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” said Lawrence Yun, chief economist of the NAR. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”

The median existing-home price for all housing types in January was $303,900, up 14.1% from January 2020 ($266,300), as prices increased in every region. January’s national price jump marks 107 straight months of year-over-year gains.

“Home sales are continuing to play a part in propping up the economy,” Yun said. “With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year.”

Yun says he expects more jobs to return, which will spur homebuying in the coming months. He predicts existing-home sales will reach at least 6.5 million in 2021, even as he says mortgage rates are likely to inch higher due to the rising budget deficit and higher inflation.

But more production is needed from home builders. Total housing inventory at the end of January totaled 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million). 

Unsold inventory sits at a 1.9-month supply at the current sales pace, equal to December’s supply and down from the 3.1-month amount recorded in January 2020. NAR first began tracking the single-family home supply in 1982.

Properties typically remained on the market for just 21 days in January, seasonally even with December, and down from 43 days in January 2020. And 71% of the homes sold in January 2021 were on the market for less than a month.

First-time buyers were responsible for 33% of sales in January, up from 31% in December 2020 and from 32% in January 2020.

Existing-home sales by region:

•  Sales in the Northeast fell 2.2%, recording an annual rate of 870,000, a 24.3% increase from a year ago. The median price in the Northeast was $361,400, up 15.8% from January 2020.
• In the Midwest, sales inched up 1.9% to an annual rate of 1,570,000 in January, a 22.7% jump from a year ago. The median price in the Midwest was $227,800, a 14.7% increase from January 2020.
• In the South grew 3.2%, posting an annual rate of 2,940,000 in January, up 25.1% from the same time one year ago. The median price in the South was $263,300, a 14.6% climb from a year ago.
• Sales in the West fell 4.4% from the month prior, recording an annual rate of 1,310,000 in January, a 21.3% increase from a year ago. The median price in the West was $461,800, up 16.1% from January 2020.