The onset of spring typically coincides with an increase in consumer spending, and this year seems to be no exception. In a recent report done by the National Association of Realtors, they believe we are heading toward some light at the end of the tunnel. In this article, we will provide the details of that report.
As a result of the ongoing epidemic, existing-home sales have been falling steadily for the past 12 months, with January representing the twelfth consecutive month of drop. The median price of a home, though, continues to rise.
The National Association of Realtors announced on Tuesday that the total existing-home sales, which includes single-family homes, townhomes, condominiums, and cooperatives, fell 0.7% in January compared to December 2022. The decline in home sales is about 37% from the previous year (at a seasonally adjusted annual rate of 4 million in January).
Economists predict a rebound in home sales this spring now that mortgage rates are beginning to level out.
Housing market bottoming out: NAR head economist Lawrence Yun. Costs go up or down based on the accessibility of the market, with more affordable areas seeing price increases and more pricey ones seeing decreases.
According to NAR, the national median sales price for an existing home increased by 1.3% from a year ago, to $359,000. The West was the only major region in the United States where home values dropped last month, while the other three all saw increases.
House prices have remained high because of the persistent shortage of available properties on the market. Total housing inventory increased by 2.1% in January compared to the previous month and 15.3% from the same time last year. With the present sales rate, there is still a healthy 2.9 months' worth of inventory that has not been moved.
Although supplies are still low, Yun notes that buyers are gaining bargaining leverage. Properties that have been on the market for more than 60 days often sell for 10 percent below their asking price.
Take a look at these other important metrics from the NAR's recent housing report:
In terms of days on market, January saw sales of 54% of residences that had been on the market for less than a month. As compared to December (when they were on the market for an average of 26 days) and January (when they were on the market for an average of 19 days), January saw homes on the market for an average of 33 days.
First-time buyers are coming back into the market now that competition has eased. In January, first-time purchasers made up 31% of all transactions, up from 27% a year earlier.
The percentage of January sales that were conducted entirely with cash increased to 29%, from 27% in January 2022. The majority of buyers who pay in cash are private investors and people purchasing second homes. In January, they only accounted for 16% of homebuyers, down from 22% the year before.
The percentage of sales that are foreclosures or short sales remains extremely low. In January, the percentage of total sales that were distressed transactions was 1%, which was consistent with the same month a year ago.
Here is a look at the state of existing-home sales in every region of the United States in the month of January:
Sales of previously owned homes in the Northeast decreased 3.8% from December to a seasonally adjusted annual pace of 500,000 in January. Compared to the previous year, sales dropped by over 36%. Increase of 0.3% from January 2022's median price of $383,000
Midwest: January sales were down 5% from December and 960,000 units annually. From last year, sales dropped by 33.3%. Prices have increased by 2.7% since January 2022, reaching a median of $252,300.
The annual rate of sales in the South increased to 1.82 million in January, up 1.1% from December. Total sales are down by over 37% compared to the same period last year. A rise of 3.4% over last year's median price of $315,000 brings us to a current median price of $332,000.
For the western region, the annual rate of existing home sales increased by 2.9% in January to 720,000, but this was still 42.4% lower than the same month a year ago. Average cost: $525,200, down 4.6% from January 2022
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