February 21, 2023 By: Melissa Dittmann Tracey
Spring is around the corner, and the signs are pointing to a pick-up in sales on the horizon. Read more from NAR’s latest housing report.
Existing-home sales continued to ease in January, marking a yearlong stretch of declines coming off pandemic-fueled highs. But median home prices still are rising.
Total existing-home sales—completed transactions that include single-family homes, townhomes, condos and co-ops—decreased 0.7% in January compared to December 2022, the National Association of REALTORS® reported Tuesday. Home sales are down nearly 37% compared to a year earlier (at a seasonally adjusted annual rate of 4 million in January).
But as mortgage rates begin to stabilize, economists are hopeful for a turnaround in sales activity for the housing market heading into spring.
“Home sales are bottoming out,” says Lawrence Yun, NAR’s chief economist. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Overall, the median existing-home sales price nationwide rose 1.3% compared to a year ago, reaching $359,000, NAR reports. Home prices climbed in three out of the four major regions of the U.S., only falling in the West last month.
The supply of homes for sale continues to be tight in most markets across the country, helping to keep home prices higher. Still, total housing inventory rose 2.1% in January month-over-month and is up by 15.3% compared to a year ago. Unsold inventory, remains, at a brisk, 2.9-month supply at the current sales pace.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun says. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
Here’s a closer look at other key indicators from NAR’s latest housing report:
Days on the market: Fifty-four percent of homes sold in January were on the market for less than a month in January. On average, properties remained on the market for 33 days in January, up from 26 days in December and 19 days a year earlier.
First-time home buyers: As competition lessens, first-time home buyers are re-emerging. First-time buyers accounted for 31% of sales in January, up from 27% a year earlier.
All-cash sales: All-cash transactions comprised 29% of sales in January, up from 27% in January 2022. Individual investors and second-home buyers tend to make up the biggest bulk of all-cash sales. They purchased 16% of homes in January, down from 22% a year earlier.
Distressed sales: Foreclosures and short sales continue to make up a very small share of sales. Distressed sales accounted for 1% of sales in January, matching levels from a year earlier.
Here’s how existing-home sales fared across the country in January:
- Northeast: Existing-home sales fell 3.8% from December, reaching an annual rate of 500,000 in January. Sales were down nearly 36% from a year earlier. Median price: $383,000, up 0.3% from January 2022
- Midwest: Sales decreased 5% compared to the previous month, reaching an annual rate of 960,000 in January. Sales were down 33.3% from one year ago. Median price: $252,300, up 2.7% from January 2022
- South: Sales rose 1.1% in January compared to December, reaching an annual rate of 1.82 million. Sales are down nearly 37% from the prior year. Median price: $332,500, an increase of 3.4% from one year ago
- West: Existing-home sales increased 2.9% in January, reaching an annual rate of 720,000, but still down 42.4% from the previous year. Median price: $525,200, down 4.6% from January 2022