by Despite year-over-year gains, rising home prices and affordability remain an issue, particularly for first-time buyers
WASHINGTON — January existing home sales rose 2% from January of last year, which the National Association of Realtors said was the fourth straight month of year-over-year increases.
According to figures released Friday, existing home sales rose to 4.08 million units, compared with 4 million in January 2024, rising in the Northeast, Midwest and West, while remaining flat in the South.
However, they declined 4.9% from December, falling in the Northeast, South and West and remaining level in the Midwest, the NAR said.
Officials noted that stagnant interest rates remained a factor in the slow pace of home sales, which combined with rising prices, is making affordability an issue. For example, the median existing-home sales price rose 4.8% from January 2024 to $396,900, which the NAR said is the 19th consecutive month of year-over-year price increases.
Meanwhile, citing Freddie Mac, the NAR said the 30-year fixed rate mortgage averaged 6.85% as of Feb. 20, down from 6.9% a year prior and down from 6.87% a week earlier.
“Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve,” said NAR chief economist Lawrence Yun. “When combined with elevated home prices, housing affordability remains a major challenge.”
This is especially true for first-time buyers, who purchased 28% of existing homes in January, level with January 2024, but down from 31% in December. According to the NAR’s November 2024 Profile of Home Buyers and Sellers, the annual share of first-time buyers was 24%, the lowest on record.
The median existing-home price for all housing types in January was $396,900, which was up 4.8% from $378,600 a year ago, with all four regions of the U.S. experiencing price increases.
A further breakdown in the numbers shows that:
+ January single-family home sales declined 5.2% from December to a seasonally adjusted annual rate of 3.68 million in January, up 2.2% from the previous year. The median existing single-family home price was $402,000 in January, up 5% from January 2024.
+ January existing condominium and co-op sales declined 2.4% from December to a seasonally adjusted annual rate of 400,000 units, the same as January 2024. The median existing condo price was $349,500 in January, up 2.9% from $339,500 last year.
+ The total housing inventory at the end of January was 1.18 million units, up 16.8% from 1.01 million in January 2024 and up 3.5% from December. Unsold inventory was at a 3.5-month supply at the current sales pace, up from 3 months in January 2024 and up from 3.2 months in December.
“More housing supply allows strongly qualified buyers to enter the market,” Yun added. “But for many consumers, both increased inventory and lower mortgage rates are necessary for them to purchase a different home or become first-time homeowners.”
By region the activity was as follows:
+ In the Northeast, there were 500,000 existing homes sold in January, up 4.2% from January 2024 and down 5.7% from December. The median price in the region was $475,400, up 9.5% from one year earlier.
+ In the Midwest, existing-home sales were up 5.3% from January 2024 and unchanged from December, totaling 1 million units. The median price in the region was $290,400, up 7.2% from January 2024.
+ In the South, there were 1.83 million sales in January, level with January 2024 but down 6.2% from December. The median price in the region was $356,300, up 3.5% from last year.
+ In the West, there were 750,000 existing homes sold, up 1.4% from January 2024 but down 7.4% from December. The median price in the region was $614,200, up 7.4% from January 2024.
Other highlights of the report were as follows:
+ The Realtors Confidence Index showed that properties typically remained on the market for 41 days in January, up from 36 days in January 2024 and up from 35 days in December.
+ Cash sales represented 29% of transactions in January, down from 32% in January 2024 but up from 28% in December. Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in January, unchanged from January 2024 but up from 16% in December.
+ Distressed sales including foreclosures and short sales represented 3% of sales in January, virtually unchanged from December and the previous year.
