In the United States, sales and prices of existing homes rise again in January
Sales of previously occupied homes in the United States rose again last month, a sign that the strong housing market momentum from 2020 may continue this year.
Sales of existing homes in the United States rose 0.6% in January from the previous month to a seasonally adjusted rate of 6.69 million annualized units, the National Association of Realtors said on Friday. Sales jumped 23.7% from the previous year. This is the highest sales rate since October and the second highest since 2006.
House prices have also gone up. The median price of homes in the United States was $ 303,900 in January, an increase of 14.1% from the previous year. Prices have increased in all parts of the country.
The hot housing market has left the number of properties available for sale at an all time high. The main driver of home prices was the shortage of homes for sale.
“Sales could easily have been even 20% higher if there had been more inventory and more choice,” said Lawrence Yun, chief economist of NAR.
At the end of January, there was a record 1.04 million homes for sale nationwide, down 1.9% from December and 26% from January 2020, NAR said. At the current pace of sales, this equates to a 1.9 month supply, down from a 3.1 month supply in January 2020.
Highlighting how competitive the housing market was last month, 71% of homes sold in January had been on the market for less than a month. And the properties were generally purchased within 21 days for the fifth month in a row, NAR said.
“The days in the market continue to be very quick,” Yun said. “No winter slowdown. “
The housing market has made a comeback since last summer after falling sharply in the spring when the coronavirus outbreak hit. Sales jumped last year to the highest level since 2006, at the height of the real estate boom.
Several market trends are helping to stimulate strong demand for homeownership. Mortgage rates remain at historically low levels. Americans forced to work from home during the pandemic are looking for bigger homes. And more and more millennials are now entering the market.
This dynamic in demand, combined with the ultra-low number of homes for sale, sets the stage for a very competitive home buying season this spring.
“It’s not just a seller’s market, it’s a super seller’s market,” said Odeta Kushi, deputy chief economist at First American. “It’s an incredibly competitive home buying environment. “
If the economy improves as coronavirus vaccines become more widely available, economists predict that the housing market will continue to ride a strong wave of demand this year, even though mortgage rates are expected to rise slightly from relative at record lows.
The average 30-year fixed-rate benchmark mortgage rate rose to 2.81% this week from 2.73% last week, according to mortgage buyer Freddie Mac. A year ago, the rate was 3.49%.
The 10-year Treasury yield, which may influence interest rates on mortgages, rose sharply this week, with Wall Street factoring in the possibility of higher inflation as the economy is expected to recover. here the second half of this year.
NAR’s Yun expects the 30-year average mortgage rate to rise, possibly reaching 3% by the middle of the year.
“It would be considered historically favorable,” he said.