Existing-Home Sales Rose 0.6% in January
Washington, DC, February 19, 2021-Total existing-home sales increased 0.6% from December to a seasonally-adjusted annual rate of 6.69 million in January, according to the National Association of Realtors. Sales in total climbed year-over-year, up 23.7% from a year ago (5.41 million in January 2020).
“Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market,” said Lawrence Yun, NAR’s chief economist. “Sales easily could have been even 20% higher if there had been more inventory and more choices.”
The median existing-home price for all housing types in January was $303,900, up 14.1% from January 2020 ($266,300), as prices increased in every region. January’s national price jump marks 107 straight months of year-over-year gains.
Whereas much of the economy has suffered due to COVID-19, the housing sector has been one of the few bright spots, according to Yun. In NAR’s latest quarterly report, released last week, home prices in every tracked U.S. metro area increased during the fourth quarter of 2020.
Yun says he expects more jobs to return, which will spur homebuying in the coming months. He predicts existing-home sales will reach at least 6.5 million in 2021, even as he says mortgage rates are likely to inch higher due to the rising budget deficit and higher inflation.
Total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million). Unsold inventory sits at a 1.9-month supply at the current sales pace, equal to December’s supply and down from the 3.1-month amount recorded in January 2020. NAR first began tracking the single-family home supply in 1982.
Properties typically remained on the market for 21 days in January, seasonally even with December and down from 43 days in January 2020. Seventy-one percent of the homes sold in January 2021 were on the market for less than a month.
First-time buyers were responsible for 33% of sales in January, up from 31% in December 2020 and from 32% in January 2020. NAR’s 2020 Profile of Home Buyers and Sellers – released in late 20204 – revealed that the annual share of first-time buyers was 31%.
Individual investors or second-home buyers, who account for many cash sales, purchased 15% of homes in January, up modestly from 14% in December 2020, but down from 17% in January 2020. All-cash sales accounted for 19% of transactions in January, unchanged from December but down from 21% in January 2020.
Distressed sales-foreclosures and short sales-represented less than 1% of sales in January, equal to December’s percentage but down from 2% in January 2020.