Despite a landscape of challenges — rising interest rates and still-escalating prices — sales of existing homes hit their fastest pace in nearly a decade in January, according to the latest update from the National Association of Realtors.
And Realtors expect competition for existing homes to intensify this Spring, just below and at mid-market price levels.
The median existing-home price for all housing types in January was $228,900, up 7.1 percent from January 2016 ($213,700). January’s price increase was the fastest since last January (8.1 percent) and marks the 59th consecutive month of year-over-year gains, Realtors said.
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” said Lawrence Yun, NAR chief economist.
Total existing-home sales — completed transactions that include single-family homes, townhomes, condominiums and co-ops — grew by 3.3 percent to a seasonally adjusted annual rate of 5.69 million in January, from an upwardly revised 5.51 million in December 2016.
The Realtors’ “Affordability Distribution Curve and Score” finds that higher mortgage rates, combined with rising home prices, is making home purchase more expensive in the majority of U.S. housing markets reviewed.
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” added Yun. “The combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.”
Total housing inventory at the end of January jumped 2.4 percent to 1.69 million existing homes available for sale. That’s still 7.1 percent lower than a year ago (1.82 million). Total inventory has fallen year-over-year for 20 straight months.