In another sign of a slowing housing market due to high mortgage rates and increasing prices, existing home sales in January fell 4.9% from December to a seasonally adjusted annual rate of 4.08 million, according to the National Association of Realtors (NAR).
Despite the downturn, year-over-year sales rose 2.0%, up from an annual rate of 4 million home sales in January 2024. The median price of existing home sales, which include single-family homes, condominiums and co-ops, rose 4.8% from one year ago to $396,900, the 19th consecutive month of year-over-year price increases.
The inventory of unsold existing homes in January grew 3.5% from the prior month to 1.18 million, 16.8% higher than one year ago. Unsold inventory reached a 3.5-month supply at the current sales pace, up from 3.0 months in January 2024.
January single-family home sales declined 5.2% from the previous month to a seasonally adjusted annual rate of 3.68 million. However, sales were still up 2.2% year over year. The median existing home price was $402,0000 in January, up 5.0% from January 2024.
Existing condominium and co-op sales fell 2.4% in January to a seasonally adjusted annual rate of 400,000 units, the same as one year ago. The median price for an existing condominium was $349,500 in January, up 2.9% year over year.
“Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve,” said NAR Chief Economist Lawrence Yun. “When combined with elevated home prices, housing affordability remains a major challenge.”
NAR found that properties typically remained on the market for 41 days in January, up from 35 days in December and 36 days a year ago. First-time homebuyers accounted for 28% of sales in January, down from 31% in December and the same as one year ago.
Cash sales accounted for 29% of January transactions, up from 28% in December but down from 32% in January 2024. Distressed sales, which include foreclosures and short sales, accounted for 3% of sales during the month, unchanged from one year ago.
Individual investors or second-home buyers, who account for most cash sales, bought 17% of homes in January, up 16% from December and unchanged from January 2024.
