Economy: Existing Home Sales During January, 2019

The Existing Home Sales report for January, 2019 was released by The National Association of Realtors® (NAR) this morning:

Predicted: 5,040,000
Actual: 4,940,000

Change from Previous Month: -1.2%
Change from One Year Previous: -8.5%

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Inventory: 1,590,000 (3.9 months supply)

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The yellow-highlighted, "actual" figure above represents the preliminary, seasonally adjusted annualized sales count of existing homes, co-ops and condominiums for the indicated month. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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Median Price for A Used Home During January: $247,500

Change from One Year Previous: +2.8%

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Average Price for A Used Home During January: $286,800

Change from One Year Previous: +1.5%

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Click here for historical prices and a chart.

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From Today's Report:

"...Lawrence Yun, NAR’s chief economist, says last month’s home sales of 4.94 million were the lowest since November 2015, but that he 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. Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.'

The median existing-home price for all housing types in January was $247,500, up 2.8 percent from January 2018 ($240,800). January’s price increase marks the 83rd straight month of year-over-year gains.

Yun notes that this median home price growth is the slowest since February 2012, and is cautions that the figures do not yet tell the full story for the month of January. 'Lower mortgage rates from December 2018 had little impact on January sales, however, the lower rates will inevitably lead to more home sales.'

While total inventory grew (on a year-over-year basis) for the sixth straight month, Yun says the market is still suffering from an inventory shortage. 'In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed,' says Yun. 'Taking steps to lower construction costs would be a tremendous help. Local zoning ordinances should also be reformed, while the housing permitting process must be expedited; these simple acts would immediately increase homeownership opportunities and boost local economies.'

Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listing views per property, revealed that the hottest metro areas in January were Midland, Texas; Chico, California; San Francisco-Oakland-Hayward, California; Fort Wayne, Indiana; and Colorado Springs, Colorado.

According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage decreased to 4.46 percent in January from 4.64 percent in December. The average commitment rate for all of 2018 was 4.54 percent.

'Decelerated sales and the increases in inventory will work in favor of potential homebuyers, putting them in a better negotiating position heading into the spring months,' said NAR President John Smaby, a second-generation Realtor® from Edina, Minnesota and broker at Edina Realty. 'On top of that, low-interest rates will bring an additional $80 per month savings compared to the rates of just a few months ago.'..."