January Existing Home Sales: An Ominous Start to 2018

Palm Beach County mansion sales rose in January

Palm Beach County mansion sales rose in January

The National Association of Realtors said a stifling lack of homes on the market was driving up prices and holding down sales.

The median existing-home price for all housing types in January was 240,500 USA dollars, up 5.8 percent from 227,300 dollars in January 2017. After decline in December, the sales were 4.8 percent lower than a year ago and at the slowest pace since last September's 5.37 million units.

"The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the USA last month", says Lawrence Yun, chief economist for NAR, in a statement. "It's very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth".

The median seasonally adjusted price of existing homes sold in January surged to a new all-time record, increasing by 1.8 percent to $255,500, up 5.7 percent year-over-year.

Also on the increase was the total housing inventory, which ended January at 1.52 million existing homes available for sale, 4.1 percent above December's level.

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The Yuma Association of Realtors said Wednesday that sales of new and previously owned homes have increased this past month in comparison to last year's in January. Wages rose in January from a year earlier by the most in eight years, spurring concerns that inflation pressures are building.

First-time buyers represented 29 percent of sales in January, which is down from 32 percent in December 2017. Individual investors purchased 17 percent of homes in January, up from 16 percent comparing both previous month and a year ago. REALTORS® are already experiencing interest for the spring. However, December inventory was revised downward by about 2,000 units to 1.68 million units (SAAR), and that revision accounts for about 5 percent of the month-over-month increase in on-market inventory.

"We have hoped that the rise in rates motivates home buyers to act soon but the move in rates may have been so drastic that they are now waiting to see if rates start to make a move down", said Brian Surgener, a senior vice president at BBMC Mortgage in Lombard, Illinois. Economists often describe a "balanced" market as one with five to seven months worth of inventory. The median price for an existing single-family home was $241,700, while the median price for an existing condo was $231,600.

The decline was driven by a sharp drop in single-family home sales in the West - arguably the country's most supply-constrained region - and in the Midwest. "With demand exceeding supply in most areas, competition will only heat up in the months ahead".

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