Existing home sales jump 4.3% in January, inventory level dips
Existing home sales on all single-family homes, townhomes, condos and co-ops rose 4.3% during the month of January, making it the third sales increase in the past four months, the National Association of Realtors said Wednesday.
In January, home sales hit a seasonally adjusted annual rate of 4.57 million units, compared to a pace of 4.38 million units in December and 4.54 million units in the year-ago period.
As sales increased, inventory levels declined 0.4% from December with only 2.31 million existing homes on the market last month, representing a 6.1-month supply, down from the December inventory hold rate of 6.4 months.
“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” said Lawrence Yun, chief economist for NAR. “Foreclosure sales are moving swiftly with ready homebuyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time."
NAR said buying power — driven by lower prices and cheap interest rates — are pulling more buyers into the market, creating a dose of optimism before the spring homebuying season.
NAR remains cautiously optimistic as the real estate industry heads into the warm-weather selling season.
Meanwhile, sales prices are down 2% from January 2011, with the median existing home-price hitting $154,700 last month. Distressed homes made up of short sales and foreclosures accounted for 35% of January sales, up from 32% in December.
NAR also highlighted the role of investors, with investment-related buyers purchasing 23% of homes sold in January. That's up from 21% in December.
First-time homebuyer activity also rose to 33% of all activity, compared to 29% a year ago and 31% in December, NAR said.