The National Association of Realtors reported a decline in home sales, with previously-owned homes falling 4.9% in January compared to the prior month. On a seasonally adjusted basis, sales stood at 4.08 million units.
Analysts had expected a 2.6% decline, but sales were still lower than previous years, running at a roughly 15-year low. Lawrence Yun, chief economist for NAR, attributed this to mortgage rates remaining high despite the Federal Reserve’s efforts to cut interest rates.
In January, there were 1.18 million homes available for sale, an increase of 3.5% from December and 17% from last year. However, inventory levels are still limited, with a current supply of just over 3.5 months at the sales pace. This is above the balanced six-month mark.
The median home price in January reached $396,900, a 4.8% increase from the previous year and the highest ever for the month. All regions tracked by NAR saw price gains, with 15% of homes sold above list price.
Yun emphasized that more housing supply is necessary to allow qualified buyers to enter the market. However, he noted that lower mortgage rates are also crucial for first-time homebuyers. The share of first-time buyers accounted for 28% of sales, unchanged from last year but below historical averages.
Sales at higher price points fared better than those at lower price points. Homes priced between $100,000 and $250,000 dropped 1.2%, while those above $1 million rose nearly 27%. Realtors reported weak buyer traffic in January, with many agents putting up more signs but seeing little interest.
Source: https://www.cnbc.com/2025/02/21/january-home-sales-drop-sharply-as-prices-hit-high.html