Existing-Home Sales Declined 0.7% in December
Washington, DC, February 21, 2023-Total existing-home sales slid 0.7% from December 2022 to a seasonally adjusted annual rate of 4.00 million in January, according to the National Association of Realtors.
Year-over-year, sales retreated 36.9% (down from 6.34 million in January 2022).
“Home sales are bottoming out,” said NAR chief economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Total housing inventory2registered at the end of January was 980,000 units, up 2.1% from December and 15.3% from one year ago (850,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun added. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300), as prices climbed in three out of four U.S. regions while falling in the West. This marks 131 consecutive months of year-over-year increases, the longest-running streak on record.
Properties typically remained on the market for 33 days in January, up from 26 days in December and 19 days in January 2022. Fifty-four percent of homes sold in January were on the market for less than a month.
First-time buyers were responsible for 31% of sales in January, identical to December but up from 27% in January 2022. NAR’s 2022 Profile of Home Buyers and Sellers-released in November 2022-found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in January, unchanged from December but down from 22% in January 2022.
Distressed sales represented 1% of sales in January, identical to last month and one year ago.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.32% as of February 16. That’s up from 6.12% from the previous week and 3.92% one year ago.
According to the Wall Street Journal, “The U.S. housing market weakened in January for the 12th straight month as continued high mortgage rates kept buyers on the sidelines.
“January’s decline marked the longest streak of back-to-back monthly declines on record in figures going back to 1999, NAR said.
“Existing-home sales dropped last year to the lowest level since 2014 after a surge in mortgage rates and record-high home prices raised the cost of many home purchases by hundreds of dollars a month. The drop in affordability, along with general economic uncertainty, pushed buyers out of the market.”