Existing home sales in the United States fell slightly in January, down 1.2% month on month but it was the third monthly fall in row, the latest index data shows, as only the North East saw sales rise.
Sales are also down by 8.5% year on year and the total for January at 4.94 million were the lowest since November 2015, according to the figures published by the National Association of Realtors (NAR).
However, Lawrence Yun, NAR chief economist, does not expect the numbers to decline further going forward. ‘Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,’ he said.
‘Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months,’ he added.
The index also shows that the median price for all housing types in January was $247,500, up 2.8% from January 2018 and it was the 83rd straight month of year on year gains, but it was the slowest price growth since February 2012.
‘Lower mortgage rates from December 2018 had little impact on January sales, however, the lower rates will inevitably lead to more home sales,’ Yun pointed out.
Total housing inventory at the end of January increased to 1.59 million, up from 1.53 million existing homes available for sale in December, and represents an increase from 1.52 million a year ago. Unsold inventory is at a 3.9 month supply at the current sales pace, up from 3.7 months in December and from 3.4 months in January 2018.
‘Decelerated sales and the increases in inventory will work in favour of potential homebuyers, putting them in a better negotiating position heading into the spring months,’ said NAR president John Smaby.
A breakdown of the figures shows that sales in the Northeast increased 2.9% to an annual rate of 700,000, some 1.4% below a year ago and the median price in the Northeast was $270,000, which is up 0.4% from January 2018.
In the Midwest sales fell 2.5% month on month to an annual rate of 1.16 million in January, down 7.9% from a year ago. The median price in the Midwest was $189,700, which is up 1.4% from last year.
Existing home sales in the South dropped 1% to an annual rate of 2.08 million in January, down 8.4% year on year and the median price in the South was $214,800, up 2.5% on an annual basis.
In the West sales fell by 2.9% to an annual rate of 1.00 million in January, some 13.8% below a year ago. The median price in the West was $374,600, up 2.9% from January 2018.