Existing home sales hit a seasonally adjusted rate of 6.5 million, up 6.5% from December, according to January sales data from the National Association of Realtors.
Existing home sales jumped in January 2022, marking a strong start to the year after December sales dipped slightly over the holidays, according to data from the National Association of Realtors on Friday.
Existing home sales hit a seasonally adjusted rate of 6.5 million, up 6.5% from the previous month, according to existing home sales data for january.
Existing home inventory fell to a new low of 860,000, which is about 1.6 months off the monthly sales pace. This pace was down from 1.7 months in December 2021 and 1.9 months in January 2021.
Existing home prices continued to rise, with the median sale price rising 15.4% year-over-year in January to $350,000.
The surge in sales can likely be attributed to buyers anticipating higher mortgage rates – which hit 4% for the first time in two years – and the prevalence of investors who have the ability to complete all transactions in cash.
“Buyers were likely anticipating further rate hikes and a low rate lock-in, and investors added to aggregate demand with all-cash offers,” said NAR chief economist Lawrence Yun. “As a result, housing prices continue to rise solidly.”
The lack of inventory in the market also continues to drive up prices, with the 860,000 count for total home inventory down 16.5% from a year ago as it s stood at 1.03 million. As the number of low-cost homes continues to dissipate, the supply of high-end homes is increasing, according to Yun.
“There are more listings at the high end – homes priced over $500,000 – compared to a year ago, which should lead to less hasty decisions by some buyers “, said Yun. “Clearly, more supply is needed at the bottom of the market in order to achieve a fairer distribution of real estate wealth.”
As interest rates rise, the question remains whether they will have a significant impact on the hyper-competitive real estate market.
Realtor.com economist Danielle Hall predicted that current trends will persist throughout the year as buyers are ready to pick up the extra costs with the housing market shaken up by remote work opportunities.
“We expect that we will continue to see home sales at a relatively high level throughout 2022, as post-pandemic changes like increasing workplace flexibility allow potential buyers to broaden their horizons of geographic research and finding an affordable place to call home,” Halle said.
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