Existing Home Sales Slip Nationally & Locally, But Why?

Existing-Home Sales Tumble in January

Economists expect housing supplies to remain tight this year, which together with rising mortgage-loan rates, could result in modest existing-home sales growth in 2018.

"The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the USA last month", said NAR Chief Economist Lawrence Yun.

After last month's decline, sales are 4.8 percent below a year ago, the largest annual drop since August 2014, and their slowest pace since September.

The median seasonally adjusted price of existing homes sold in January surged to a new all-time record, increasing by 1.8 percent to $255,500, up 5.7 percent year-over-year.

Washington, Jumada II 5, 1439, February 21, 2018, SPA - Sales of existing USA homes fell unexpectedly for a second consecutive month in January, hurt by a persistent shortage of houses that is elevating prices and keeping first-time homebuyers out of the market, an industry group reported Wednesday.

First-time buyers took up 29 percent of sales in January, down from 32 percent in December 2017 and 33 percent a year ago. "There was a nice jump in new home construction in January and homebuilder confidence is high", he said.

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"The gradual uptick in wages over the last few months is a promising development for the housing market, but there's risk these income gains could be offset by the recent jump in mortgage rates", Yun said. There now is a 3.4-month supply of inventory compared to January 2017's 3.6 months. Less than six months is considered a "seller's market".

According to the National Trade Association real estate agents are hearing and seeing more interested buyers, but that traffic is not reflecting in sales.

But Ian Shepherdson of Pantheon Macroeconomics said rising mortgage rates did not explain January's slump in sales, given that sales generally lag changes in interest rates.

Properties averaged about 42 days on the market in January, down from 50 days a year ago, but up from December 2017's 40-day average. Four percent of sales were foreclosures, and 1% were short sales. January's increase was the 71st straight month of year-on-year price rises. And LaPorte County saw a 7 percent growth in sales to 76, and a 5.3 percent decline in median price to $112,700. Porter County's sales fell 9 percent to 121, while the median price rose 5.8 percent to $190,500.

A shortage of available houses on the market has driven up prices in many regions.

A total of 601 sales in January topped the same month in 2017 by 1.5 percent, according to GNIAR's Multiple Listing Service.

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