Existing-Home Sales Improve in January
RISMEDIA, Feb. 28, 2007-Sales of existing homes rose in January, reaching the highest level in seven months, according to the National Association of Realtors®. Total existing-home sales-including single-family, townhomes, condominiums and co-ops - increased 3.0 percent to a seasonally adjusted annual rate1 of 6.46 million units in January from an upwardly revised pace of 6.27 million in December. Sales were 4.3 percent below the 6.75 million-unit level in January 2006.
David Lereah, NAR's chief economist, said observers shouldn't overreact to the sales gain, or to other short-term effects. "Although we're expecting existing-home sales to gradually rise this year, and buyers are responding to the price correction, some unusually warm weather helped boost sales in January," he said. "On the flip side, the winter storms that disrupted so much of the country in February could negatively impact the housing market.
"Although the data is seasonally adjusted, these weather events are unusually large - many transaction closings were postponed in February, and home shopping was essentially shut down for about a week in many areas," he said. "We shouldn't be surprised to see a near-term sales dip, but that will be followed by a continuing recovery in home sales."
Total housing inventory levels rose 2.9% at the end of January to 3.55 million existing homes available for sale, which represents a 6.6-month supply at the current sales pace - unchanged from the revised December level. Supplies peaked at 7.4 months in October. "Inventories are looking better, but price softness should continue until spring when the market is expected to become more balanced," Lereah said.
The national median existing-home price2 for all housing types was $210,600 in January, down 3.1% from January 2006 when the median was $217,400. The median is a typical market price where half of the homes sold for more and half sold for less.
NAR President Pat Vredevoogd Combs, from Grand Rapids, Michigan, and vice president of Coldwell Banker-AJS-Schmidt, said a broader view shows the housing market stabilizing.
"The market is trending up from its low last fall, and that is important in restoring confidence to buyers who've been on the sidelines," said Combs. "Since buyers can find more favorable terms, and they are looking for a place to call home for some years to come, getting into the market now make sense because it's a choice many didn't have during the boom period of bidding wars in much of the country."
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.22% in January, up from 6.14% in December; the rate was 6.15% in January 2006.
Single-family home sales rose 3.5% to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.50 million in December, but were 4.2% below the 5.94 million-unit level in January 2006. The median existing single-family home price was $209,200 in January, down 3.5% from a year earlier.
Existing condominium and cooperative housing sales slipped 0.1% to a seasonally adjusted annual rate of 767,000 units in January from a downwardly revised pace of 768,000 in December. Last month's sales activity was 5.7% below the 813,000-unit pace in January 2006. The median existing condo price was $222,200 in January, up 0.5% from a year ago.
Regionally, existing-home sales in the West rose 5.6% to an annual pace of 1.32 million in January but were 9.6% lower than a year ago. The median price in the West was $321,300, down 4.6% from January 2006.
In the Midwest, existing-home sales increased 4.8% in January to a level of 1.53 million, and were 0.6% lower than January 2006. The median price in the Midwest was $162,600, which is 3.5% below a year ago.
Existing-home sales in the South rose 2.0% to an annual sales rate of 2.54 million in January, but were 7.3% below a year ago. The median price in the South was $174,600, which is 1.7% below January 2006.
Existing-home sales in the Northeast were at a level of 1.07 million in January, unchanged from December, and were 5.9% higher than January 2006. The median existing-home price in the Northeast was $260,700, down 1.2% from a year earlier.