A Market Overview: January Sees 3.1% Rise in Existing-Home Sales

In January, existing-home sales experienced a 3.1% increase, as reported by the National Association of REALTORS® (NAR). Across major U.S. regions, sales surged in the Midwest, South, and West, while remaining stable in the Northeast. However, compared to last year, sales saw a decline in the Northeast, Midwest, and South, with improvement noted in the West.

Total existing-home sales, which include single-family homes, townhomes, condominiums, and co-ops, rose to a seasonally adjusted annual rate of 4.00 million in January, marking a 3.1% increase from December. Yet, on a year-over-year basis, sales dipped by 1.7%.

NAR Chief Economist Lawrence Yun commented, "While home sales remain sizably lower than a couple of years ago, January's monthly gain signals a promising shift in supply and demand dynamics." Yun noted modestly higher listings and increased buyer activity, fueled by lower mortgage rates compared to the previous year.

Inventory levels saw a modest increase, with total housing inventory reaching 1.01 million units by the end of January, up 2.0% from December and 3.1% from the previous year. However, despite this uptick, unsold inventory remains at a 3.0-month supply at the current sales pace.

The median existing-home price for all housing types rose to $379,100 in January, reflecting a 5.1% increase from the previous year. This price surge is observed across all U.S. regions, indicating robust market conditions.

To further highlight the market's competitive nature, multiple offers are becoming common, especially for mid-priced homes. Additionally, the share of cash transactions reached 32%, underlining the market's strength fueled by record-high housing wealth.

According to the REALTORS® Confidence Index, properties spent an average of 36 days on the market in January, up from 29 days in December. First-time buyers represented 28% of sales, while all-cash transactions accounted for 32%, indicating continued investor activity in the market.

In summary, January's existing-home sales data suggests a resilient housing market, characterized by increased buyer demand, limited inventory, and rising prices. As market dynamics continue to evolve, both buyers and sellers navigate a landscape marked by competitive bidding and swift sales.