Sales of existing homes are struggling to shake off their winter slump, according to a report released Thursday by the National Association of Realtors. Sales of existing single-family homes, townhomes, condominiums and co-ops fell 1.7% annually to a seasonally adjusted 4.0 million units from 4.03 million units in January 2023.
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Existing home sales struggle to escape winter slump, National Association of Realtors says report released on thursday.
Sales of existing single-family homes, townhomes, condominiums and co-ops fell 1.7% annually to a seasonally adjusted 4.0 million units from 4.03 million units in January 2023. Despite the annual decline, existing home sales performed much better on a monthly basis, rising 3.1% from December, as mortgage rates slowed and new home listings increased slightly.
Regionally, existing home sales declined year over year in the Northeast (-5.9%), Midwest (-3.1%) and South (-1.6%). At the same time, except for the Northeast region, where the sales growth rate was the same as in December, sales volume in all regions increased compared with the previous quarter. The West region was the only region experiencing annual and monthly growth.
Lawrence Yun
“While home sales are still significantly lower than they were a few years ago, January’s monthly increase is the beginning of increased supply and demand,” said NAR Chief Economist Lawrence Yun. “The number of listings is up slightly compared to the end of last year. , homebuyers are taking advantage of lower mortgage rates.”
The median home price continued to rise in January, with an annual increase of 5.1%, reaching a record high of $379,800.
“The median home price hit a record high in January,” Yun said. “Multiple offers are common on mid-priced homes, and many homes still sell within a month. The share of cash transactions increased (32%), indicating that the market is filled with multiple offers and is driven by record housing wealth.”
While Yun was optimistic about existing home results in January, Realtor.com chief economist Danielle Hale expressed reservations about monthly gains in the coming months. Hale said existing home sales are likely to remain slow in the spring as buyers and sellers await the Federal Reserve’s first interest rate cut.
Danielle Hale
“Recent surveys show consumers expect mortgage rates to fall further in 2024, but the hot jobs report on the heels of that and rising CPI inflation data have temporarily ended the decline in mortgage rates, which could mean Sales are slowing on a seasonally adjusted basis as the peak homebuying season is approaching,” she said.
Still, she said, some homebuyers — especially millennials — say they plan to buy a home this year, even as interest rates climb back to 8%.
Dr. Lisa Sturtevant, chief economist at Bright MLS, agrees with Hale’s sentiments about the robustness of millennial homebuyers. However, with the gap between rich and poor growing, she worries about whether a handful of millennials can handle the market.
“Nonwhite individuals and households benefited most from historically low interest rates in late 2020 and early 2021,” she said. “However, interest rates are now much higher and home prices are rising, causing homebuyers to slow down.”
“Delaying home ownership – or having to postpone it entirely – means many individuals and families miss out on critical pathways to building wealth,” she added. “The already very high wealth gap in the United States will widen as existing homeowners and higher-income families are able to own homes, while lower-income and future first-time and first-generation families will increasingly stay in and get out.”
Email Marianne McPherson
