Existing-home sales rose in January, making a notable move upward following a previous month where sales declined, according to the National Association of Realtors (NAR). On a month-over-month basis, each of the four major U.S. regions experienced an increase in sales in January. However, year-over-year, activity was mixed as two regions reported sagging sales, another watched sales increase and a fourth region remained flat.
Total existing-home sales, completed transactions that include single-family homes, townhomes, condominiums, and co-ops, climbed 6.7 percent from December to a seasonally adjusted annual rate of 6.50 million in January. Year-over-year, sales fell 2.3 percent (6.65 million in January 2021).
“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.”
Total housing inventory at the end of January amounted to 860,000 units, down 2.3 percent from December and down 16.5 percent from one year ago (1.03 million). Unsold inventory sits 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 has risen at the higher price range. He noted that such increases will continue to shift the mix of buyers toward high-income consumers.
“There are more listings at the upper end – homes priced above $500,000 – compared to a year ago, which should lead to less hurried decisions by some buyers,” Yun added. “Clearly, more supply is needed at the lower-end of the market in order to achieve more equitable distribution of housing wealth.”
The median existing-home price for all housing types in January was $350,300, up 15.4 percent from January 2021 ($303,600), as prices rose in each region. This marks 119 consecutive months of year-over-year increases, the longest-running streak on record.
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. Seventy-nine percent of homes sold in January 2022 were on the market for less than a month.
First-time buyers were responsible for 27 percent of sales in January, down from 30 percent in December and down from 33 percent in January 2021.
Yun explained that the forthcoming increase in mortgage rates will be problematic for at least two market segments.
“First, some moderate-income buyers who barely qualified for a mortgage when interest rates were lower will now be unable to afford a mortgage,” he said. “Second, consumers in expensive markets, such as California and the New York City metro area, will feel the sting of nearly an additional $500 to $1000 in monthly payments due to rising rates.”
Single-family and Condo/Co-op Sales
Single-family home sales jumped to a seasonally adjusted annual rate of 5.76 million in January, up 6.5 percent from 5.41 million in December and down 2.4 percent from one year ago. The median existing single-family home price was $357,100 in January, up 15.9 percent from January 2021.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 740,000 units in January, up 8.8 percent from 680,000 in December and down 1.3 percent from one year ago. The median existing condo price was $297,800 in January, an annual increase of 10.8 percent.
Regional Breakdown
Existing-home sales in the Northeast grew 6.8 percent in January, posting an annual rate of 780,000, an 8.2 percent decline from January 2021. The median price in the Northeast was $382,800, up 6.0 percent from one year ago.
Existing-home sales in the Midwest rose 4.1 percent 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 percent rise from January 2021.
Existing-home sales in the South jumped 9.3 percent in January from the prior month, reporting an annual rate of 2,940,000, a gain of 0.3 percent from one year ago. The median price in the South was $312,400, an 18.7 percent surge from one year prior. For the fifth straight month, the South witnessed the highest pace of appreciation.
“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.
Existing-home sales in the West increased 4.1 percent from the previous month, registering an annual rate of 1,270,000 in January, down 6.6 percent from one year ago. The median price in the West was $505,800, up 8.8 percent from January 2021.