WASHINGTON – Existing home sales increased 2.7% in January to a seasonally adjusted 5.36 million as the median sale price fell to the lowest level in almost nine years, the National Association of Realtors reported Wednesday.
December sales were revised lower to 5.22 million from 5.28 million reported last month.
Economists polled by Thomson Reuters expected 5.220 million home sales for January, according to the median estimate.
Sales have increased in five of the last six months.
Lawrence Yun, NAR’s chief economist, said the sales growth in January is encouraging. Sales are increasing as job growth slowly increases and as the stock market rebounds. Specifically, rising rent prices are starting to “tip some renters into considering ownership,” he said.
Median sales price fell 5.9% from December and 3.7% from a year ago. They are at the lowest level since April 2002. Part of the drop in prices can be attributed to investor buyers who are seeking “super bargain properties,” Yun said.
The supply of existing homes dropped to 7.6 months from 8.2 months in December. This supply has dropped for six straight months.
Distressed sales accounted for 37% of all transactions in January, the highest level in a year.
Buyers who paid in cash accounted for 32% of all transactions. A typical level for cash transactions is around 10%, Yun said.
First-time buyers made up 29% of all purchases in January, low compared to a more normal 40%, Yun said.
New home sales data for January will be released Thursday by the Commerce Department.
