Still, home prices remained near record highs

For months, there were enough homebuyers willing to pay record-high prices at mortgage rates as high as 7% to keep home sales fairly stable. In January, there were signs those buyers are now harder to find.
In January, existing home sales in the United States experienced a notable decline, as reported by the National Association of Realtors. The total sales, encompassing single-family homes, townhomes, condominiums, and co-ops, fell by 4.9% from December, reaching a seasonally adjusted annual rate of 4.08 million.
Despite this monthly drop, sales showed a year-over-year improvement of 2%, up from 4 million in January 2024. Still, it was a far cry from past years.
The decline in sales was observed across three major U.S. regions, while the Midwest remained steady. Year-over-year, sales increased in three regions and remained unchanged in the South.
NAR Chief Economist Lawrence Yun highlighted the challenges posed by persistent mortgage rates and high home prices.
"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve," Yun said in a statement. "When combined with elevated home prices, housing affordability remains a major challenge."
With fewer sales, inventory is growing
The total housing inventory at the end of January was 1.18 million units, marking a 3.5% increase from December and a significant 16.8% rise from the previous year. The unsold inventory now represents a 3.5-month supply at the current sales pace, up from 3.2 months in December and 3.0 months in January 2024.
Yun noted that the increased housing supply offers opportunities for well-qualified buyers to enter the market. However, he emphasized that both increased inventory and lower mortgage rates are essential for many consumers to purchase a different home or become first-time homeowners.
Unfortunately for buyers, the median existing home price for all housing types in January was $396,900, reflecting a 4.8% increase from the previous year. All four U.S. regions reported price increases, underscoring the ongoing upward trend in home prices across the country.
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Posted: 2025-02-24 01:11:53