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Sales of existing homes faded for the 12th-consecutive month in January as the housing market bottomed out, according to data released Tuesday by the National Association of Realtors.
Existing-home sales slid 0.7 percent between December and January to a seasonally adjusted annual rate of 4 million, or 36.9 percent lower than levels seen a year prior, the new data shows.
The continued decline came following a mortgage rate peak of around 7 percent in November, bringing about one of the slowest periods of buyer activity amid an already slow fall. As rates have declined in the new year, however, buyer activity has begun to pick back up despite conditions that vary widely from market to market, data shows.
Lawrence Yun
“Home sales are bottoming out,” NAR Chief Economist Lawrence Yun said in a statement. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Other experts theorized that the slow decline in mortgage rates is resulting in a bottoming out of home sales as buyers gradually reenter the market.
“Lower mortgage rates toward the end of 2022 are likely a factor behind the floor in home sales that appears to be developing,” Realtor.com Chief Economist Danielle Hale said in a statement. “The number of homes for sale is recovering, and combined with fewer buyers in the market, balance is shifting back toward those who are shopping.”
Total housing inventory registered at the end of January was 980,000 units, up 2.1 percent from December and 15.3 percent from one year ago. Unsold inventory currently sits at a 2.9 month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.
The median existing home sale price increased 1.3 percent from a year ago to $359,000. Prices climbed in three out of the four major regions in the United States, falling only in the West. Properties typically remained on the market for 33 days in January, up from 26 days in December and 19 days in January 2022.
While the low-inventory environment of early 2022 remains, buyers are finding themselves with more negotiating power due to houses sitting on the market for longer, Yun said.
“Inventory remains low, but buyers are beginning to have better negotiating power,” he said. “Homes sitting on the market for more than 60 days can be purchased for around 10 percent less than the original list price.”
