January Real Estate Snapshot: Home Sales Rise Amidst Inventory Challenges

Summary:

In January, existing home sales in the U.S. increased by 3.1%, showing notable growth in the Midwest, South, and West regions while remaining steady in the Northeast. Despite a 1.7% year-over-year decline, the market saw positive signs, with increased listings and homebuyers taking advantage of lower mortgage rates.

The total housing inventory rose by 2.0%, reaching 1.01 million units, representing a 3.0-month supply at the current sales pace. The median existing home price surged to $379,100, marking a 5.1% increase from the previous year. However, challenges like rising mortgage rates and reduced affordability persisted.

The REALTORS® Confidence Index revealed that properties stayed on the market for an average of 36 days in January, with first-time buyers constituting 28% of sales. Cash transactions accounted for 32%, and investors purchased 17% of homes. Distressed sales remained at 2%.

Mortgage rates edged up to 6.77%, contributing to market dynamics. Single-family home sales rose by 3.4%, while existing condominium and co-op sales remained unchanged. Regional variations were observed, with the West leading in sales growth at 4.3%, followed by the South at 4.0%, the Midwest at 2.2%, and the Northeast remaining unchanged.

The market faces challenges, but NAR President Kevin Sears emphasized the importance of additional listings, advocating for legislative support to stimulate inventory growth.

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