Existing-home sales increased 3.3 percent, and reached a 10-year high in January, according to the National Association of Realtors® recent release.
Sales hit 5.69 million, the strongest sales pace since February 2007. The sales pace is 3.8 percent higher than January 2016, but the median home price rose 7.1 percent year-to-year to $228,900. This is the 59th consecutive month representing year-to-year price increases.
Nearly every region, excluding the Midwest, saw increases. In the Northeast, sales rose 5.3 percent, increasing to an annual rate of 800,000, 6.7 percent higher than January 2016. The median home price was $253,800, up 2.5 percent from this time last year.
“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,” he said. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability condition,” said Dr. Lawrence Yun, chief economist at NAR.
First-time homebuyers represented a third (33 percent) of purchasers, an increase of 1 percent from December and last January.
Housing inventory saw an increase of 2.4 percent, rising to 1.69 million existing homes for sale. However, it is still 7.1 percent below January 2016’s housing inventory, which was 1.82 million. Time on the market has also dropped from 52 days in December to 50 days in January.
All-cash sales represented 23 percent of purchases, a 2 percent increase from December, but a 3 percent decrease from January 2016.
“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,” said 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.”