January is a big month for existing-home sales
Existing-home sales rebounded significantly in January.
Following the December 2021 decline, the National Association of Realtors (NAR) reported that total existing-home sales increased 6.7% to a seasonally adjusted rate of 6.50 million last month.
Sales dropped 2.3% to a rate of 6.65 million on a year-over-year basis, however. Total existing-home sales include completed transactions of single-family homes, townhomes, condos, and co-ops.
Existing single-family home sales surged upward by 6.5% to a seasonally adjusted annual rate of 5.76 million in January compared to 5.41 million in December. But sales were down 2.4% in comparison to January 2021.
Rising mortgage rates might have had a big hand in the sudden increase.
“Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, NAR’s chief economist. “Consequently, housing prices continue to move solidly higher.”
Housing inventory continues to be a problem and contributor to lofty home prices. Total inventory at the end of January totaled 860,000 units, down 2.3% from December.
But the latest figure also marks a big 16.5% dropoff from 1.03 million units at the same time a year ago.
Unsold inventory is currently at a 1.6-month supply at the current sales pace, down from 1.7 months in December and from 1.9 months in January 2021.
“The inventory of homes on the market remains woefully depleted, and in fact is currently at an all-time low,” Yun said.
According to Yun, homes priced at $500,000 and below are disappearing, while supply continues to rise at a higher price range. The median existing single-family home price was $357,100 in January, leaping 15.9% from January 2021.
“Clearly, more supply is needed at the lower end of the market in order to achieve more equitable distribution of housing wealth,” Yun noted.
The median existing-home price for all housing types in January was $350,300, up 15.4% from January 2021 with prices rising 2021 ($303,600), as prices rose in each U.S. region. This marks 119 consecutive months of year-over-year increases, the longest-running streak on record.
The median existing single-family home price was $357,100 in January, up 15.9% from January 2021.
Properties typically remained on the market for 19 days in January, equal to days on market for December, and down from 21 days in January 2021. About 79% of homes sold in January 2022 were on the market for less than a month.
Here’s how January’s existing-home sales performed on a regional basis:
- Existing-home sales in the Northeast grew 6.8% in January, posting an annual rate of 780,000, an 8.2% decline from January 2021. The median price in the Northeast was $382,800, up 6.0% from one year ago.
- Existing-home sales in the Midwest rose 4.1% from the prior month to an annual rate of 1,510,000 in January, equal to the level seen from a year ago. The median price in the Midwest was $245,900, a 7.8% rise from January 2021.
- Existing-home sales in the South jumped 9.3% in January from the prior month, reporting an annual rate of 2,940,000, a gain of 0.3% from one year ago. The median price in the South was $312,400, an 18.7% surge from one year prior. For the fifth straight month, the South witnessed the highest pace of appreciation.
- Existing-home sales in the West increased 4.1% from the previous month, registering an annual rate of 1,270,000 in January, down 6.6% from one year ago. The median price in the West was $505,800, up 8.8% from January 2021.
“The migration to the Southern states is clearly getting reflected in higher home sales and fast-rising home prices compared to other regions,” Yun said.
