NEW YORK – Existing home sales increased 4.3% in January to a seasonally adjusted 4.57 million-unit rate, after a downwardly revised 4.38 million unit rate in December originally reported as 4.61 million units, the National Association of Realtors announced Wednesday.
Economists polled by Thomson Reuters predicted 4.65 million sales.
On a year-over-year basis, sales overall were up 0.7% from a 4.54 million unit sales pace last January.
“The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents,” said Lawrence Yun, NAR chief economist.
“The broad inventory condition can be described as moving into a rough balance, not favoring buyers or sellers,” Yun said. “Foreclosure sales are moving swiftly with ready home buyers and investors competing in nearly all markets. A government proposal to turn bank-owned properties into rentals on a large scale does not appear to be needed at this time.”
Sales rose in the four regions of the country in January, increasing 3.4% in the Northeast to 600,000, climbing 1.0% to 980,000 units in the Midwest; and jumping 3.5% in the South to 1.76 million. In the West sales grew 8.8% to 1.23 million units, NAR said.
Inventory levels slid 0.4% at the end of Januaryr, to 2.31 million existing homes for sale, representing a 6.1-month supply at the current sales pace, down from 6.4 months in last month’s report.
Meanwhile, the national median existing home price was $154,700 in January, off 2.0% from a year ago.
Distressed homes – foreclosures and short sales which sell at deep discounts – accounted for 35% of January sales (22% were foreclosures and 13% were short sales), up from 32% in December; but down from 37% in January 2011.
“Home buyers over the past three years have had some of the lowest default rates in history,” Yun said. “Entering the market at a low point and buying at discounted prices have greatly helped in that success.”
The national average 30-year, fixed-rate mortgage was a record low 3.92%, in January down from December’s 3.96%, NAR said. The rate was 4.76% in January 2011.
“Word has been spreading about the record high housing affordability conditions and our members are reporting an increase in foot traffic compared with a year ago,” said Moe Veissi, NAR president. “With other favorable market factors, these are hopeful indicators leading into the spring home-buying season. We’re cautiously optimistic that an uptrend will continue this year.”