U.S. home sales fell again in January
LOS ANGELES — The nation’s housing slump dragged on into January as home sales fell for the 12th consecutive month to the slowest pace in more than a dozen years.
The National Association of Realtors said Tuesday that existing U.S. home sales fell to a seasonally adjusted annual rate of 4 million properties last month. That’s the slowest annual pace since October 2010, when the housing market was still reeling from the 2008 foreclosure crisis.
January’s sales cratered by nearly 37 percent from a year earlier and slipped 0.7 percent from December. Economists had projected a modest monthly rise in sales, according to FactSet.
The median U.S. home price edged up 1.3 percent from January last year to $359,000. That’s the slowest annual increase in home prices since February 2012. The median home price is down around 13 percent since it peaked in June last year.
The modest monthly sales drop and small increase in home prices suggests the housing market downturn may be nearing an end, said Lawrence Yun, the NAR’s chief economist.
“We have to wait until things develop, but perhaps home sales are bottoming out right now,” he said.
The path to homeownership was still largely unsurmountable for many Americans in January, as mortgage rates eased from their November highs, but remained roughly double what they were a year earlier. As rates rise, they can add hundreds of dollars to monthly mortgage payments.
Consider, the monthly mortgage payment on a typical U.S. starter home priced at $321,900, after factoring in a 10 percent down payment, was $1,931 in the fourth quarter, or 57 percent higher than a year earlier, according to data from the NAR.
Still, some market trends have begun shifting in buyers’ favor. The number of homes for sale remains tight by historical standards but increased 2.1 percent in January from the previous month to 980,000 properties, snapping a five-month skid, and was up 15.3 percent from January last year, the NAR said.
That amounts to a 2.9-month supply at the current sales pace, up from 1.6 percent in January last year.
In a more balanced market between buyers and sellers, there is a five- to six-month supply.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun said. “Homes sitting on the market for more than 60 days can be purchased for around 10 percent less than the original list price.”
While home prices rose overall, they fell in roughly half the country last month, Yun noted.
On average, homes sold in 33 days of hitting the market in January. That’s up from 26 days in December and 19 days in January last year.
The increase reflects more properties sitting on the market longer, though more than half of all homes sold last month were snapped up in less than a month of being put up for sale, the NAR said.
Having more homes to choose from likely helped out first-time homebuyers, which accounted for 31 percent of January’s home sales, unchanged from the previous month, but up from 27 percent a year earlier.