Existing-home sales decreased 3.2 percent to a seasonally adjusted annual rate (SAAR) of 5.38 million in January — dipping from a downwardly revised 5.56 in December 2017, the National Association of Realtors (NAR) reported today.
This month’s sales pace is 4.8 percent below January 2017 and is the largest annual decline since August 2014 (5.5 percent) and the slowest pace since September 2017 (5.37 million)
Low inventory is holding the market back once again
The median existing-home price for all housing types rose 5.8 percent to $240,500, making January the 71st month in a row to see year-over-year gains.
At the end of January, total housing inventory rose 4.1 percentage points month-over-month to 1.52 million homes for sale, while year-over-year inventory dropped 9.5 percentage points. It was the 32nd consecutive month of year-over-year declines.
Unsold inventory is at a 3.4-month supply.
“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” said Yun in a statement. “While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace.”
“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,” he added.
While existing-home sales are struggling right now, Yun says there’s a silver lining — healthy new residential construction starts.
“Another month of solid price gains underlines this ongoing trend of strong demand and weak supply,” finished Yun. “The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability.”
“However, there’s hope that the tide…