Existing-home sales continue to rise
Marking the second consecutive month of growth, existing-home sales inched up 0.6% to a seasonally adjusted annual rate of 6.69 million—23.7% higher than last year.
“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 the National Association of Realtors® (NAR’s) chief economist, Lawrence Yun. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”
Meanwhile, home prices are climbing as well, with January’s median existing home price coming in at $303,900—14.1% higher than last year—and marking the 107th straight month of year-over-year gains.
Positive predictions for the year ahead, despite inventory concerns
Yun notes that the housing sector continues to be a bright spot in an otherwise struggling economy due to COVID. “Home sales are continuing to play a part in propping up the economy,” says Yun. “With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year.”
Yun is hopeful that more jobs will return and expects this to stimulate even more homebuying in the months ahead—predicting existing-home sales to reach at least 6.5 million in 2021.
As home prices and sales soar, inventory continues to shrink. At the end of January, housing inventory was down 1.9% from December and 25.7% from last year, totaling 1.04 million units. Homes are being swept up quickly with 71% of homes sold in January on the market for less than a month.
Hopes to extend homeownership’s reach
“This year, more than ever, we are prepared and eager to help families and neighbors secure housing,” said NAR President Charlie Oppler. “NAR is working to close the racial homeownership gap, secure equal access to housing for all Americans and address housing affordability issues plaguing communities across the country.”
Experts hope that historically low mortgage rates will help make homeownership a possibility for new buyers, even as rates gradually begin to increase. Currently, rates remain low, albeit a slight increase from December. Freddie Mac reports the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.74% in January, compared to December’s average of 2.68%. For context, the average commitment rate for all of 2020 was 3.11%.
Across the regions
While month-over-month buying activity varied from region to region, all four major regions saw double-digit growth from a year-over-year standpoint.
January existing-home sales:
- Northeast: down 2.2% to an annual rate of 870,000—a 24.3% increase from last year
- Midwest: up 1.9% to an annual rate of 1,570,000—a 22.7% increase from last year
- South: up 3.2% to an annual rate of 2,940,000—a 25.1% increase from last year
- West: down 4.4% to an annual rate of 1,310,000—a 21.3% increase from last year
Home prices were also up across the board with all regions seeing double-digit gains in median home prices.
January median home prices:
- Northeast: $361,400—up 15.8% from last year
- Midwest: $227,800—up 14.7% from last year
- South: $263,300—up 14.6% from last year
- West: $461,800—up 16.1% from last year