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Home sales flag in January


Existing-home sales fell for the second consecutive month in January, according to National Association of Realtors (NAR). Realtors primarily blamed the flagging sales on a lack of homes for sale in affordable price ranges.

“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” NAR Chief Economist Lawrence Yun said.

homesale“While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace,” Yun continued. “It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”

Existing-home sales ran at an annualized pace of 5.38 million in January, down 3.2 percent from a downwardly revised December reading of 5.56 million. The pace also was 4.8 percent lower than one year earlier, the largest annual drop since August 2014.

Home prices rose on an annual basis for the 71st consecutive month. The median existing-home price was $240,500 in January, an annual gain of 5.8 percent. Overall housing inventory rose by just over 4 percent, to 1.52 million existing homes. That was still 9.5 percent lower than a year ago. Inventories have fallen year-over-year for 32 consecutive months. The unsold inventory was at a 3.4 months supply, which was down from 3.6 months one year earlier.

Yun said that one bright spot in January was that housing construction starts were up significantly. Generally speaking, however, the supply of homes for sale has far lagged the demand.

“The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability,” Yun said, noting that rising interest rates could put more pressure on affordability, although rising incomes could lessen the impact of higher rates.

NAR estimated that first-time homebuyers represented 29 percent of all buyers in January, which is down from 33 percent a year earlier.   


 

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