January existing-home sales continue slowdown of declines, dropping just 0.7%
Marking a year of declines, existing-home sales dropped for the 12th consecutive month in January, but results were varied by region. Two of the four major regions across the U.S. saw a slight increase according to National Association of Realtors® (NAR). Total existing-home sales were down just 0.7% from December.
“Home sales are bottoming out,” said Lawrence Yun, Chief Economist at NAR. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
All four regions saw declines in existing-home sales activity last January, but activity was similar to where it was the month before:
- Northeast: Down 3.8% to an annual rate of 500,000, down 35.9% from January 2022
- Midwest: Down 5.0% to an annual rate of 960,000, down 33.3% from January 2022
- South: Up 1.1% to an annual rate of 1,820,000, down 36.6% from January 2022
- West: Up 2.9% with an annual rate of 720,000, down 42.4% from January 2022
Adjusting to a new normal in rates
While month-over-month activity is somewhat encouraging based on the fact that the pace of decline seems to be slowing, year-over-year data is still stark. It’ important to keep in mind that there was much more home sales a year ago, when average mortgage rates nationally were around 3.92%. Rates have been hovering above 6% for much of 2023.
Month | Month-over-month | Year-over-year | Seasonally Adjusted Annual Rate |
Up 6.7% | Down 2.3% | 6.5 million | |
Down 7.2% | Down 2.4% | 6.02 million | |
Down 2.7% | Down 4.5% | 5.77 million | |
Down 2.4% | Down 5.9% | 5.61 million | |
Down 3.4% | Down 8.6% | 5.41 million | |
Down 5.4% | Down 14.2% | 5.12 million | |
Down 5.9% | Down 20.2% | 4.81 million | |
Down 0.4% | Down 19.9% | 4.80 million | |
Down 1.5% | Down 23.8% | 4.71 million | |
Down 5.9% | Down 28.4% | 4.43 million | |
Down 7.7% | Down 35.4% | 4.09 million | |
Down 1.5% | Down 34.0% | 4.02 million | |
January | Down 0.7% | Down 36.9% | 4.00 million |
Possible good news for inventory and prices?
The median single-family home price in January was $359,000, a drop from the $366,900 mark in December and just a slight 1.3% increase from January 2022 ($354,300).
In addition, total housing inventory was up 2.1% in January to 980,000 units. This is even a significant increase from a year ago of 15.3%.
Dropping home prices and higher inventory are good indicators for the upcoming spring selling season, though these numbers are still on the extremes from a historical perspective.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun says. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
Month | Median existing-home price | Month-over-month | Year-over-year |
$350,300 | Down 2.2% | Up 15.4% | |
$357,300 | Up 2.0% | Up 15.0% | |
$375,300 | Up 5.0% | Up 15.1% | |
$391,200 | Up 4.2% | Up 10.8% | |
$407,600 | Up 4.2% | Up 14.8% | |
$416,000 | Up 2.1% | Up 13.4% | |
$403,800 | Down 2.9% | Up 10.8% | |
$389,500 | Down 3.5% | Up 7.7% | |
$384,800 | Down 1.2% | Up 8.4% | |
$379,100 | Down 1.5% | Up 6.6% | |
$370,700 | Down 2.2% | Up 3.5% | |
$366,900 | Down 1.0% | Up 2.3% | |
January | $359,000 | Down 2.2% | Up 1.3% |
Current housing inventory represents a 2.9-month supply of unsold inventory at the current sales pace, same as December and up from the 1.6 month supply we saw in January of 2022.
Source: https://www.nar.realtor/newsroom/existing-home-sales-descended-0-7-in-january