The housing market started 2017 at a running pace, according to the latest National Association of RealtorsⓇ’ (NAR) monthly report. Existing-home sales not only surpassed a recent cyclical high, but increased in January to the fastest pace in nearly 10 years. All regions except the Midwest saw significant increases.
Existing-Home Sales
Sales across the nation averaged a 3.3% increase from December. Sales were also up noticeably year over year, a 3.8% increase from January 2016. The seasonally adjusted rate of 5.69 million makes January the strongest month on record since February 2007 (5.79 million).
Existing-home sales in the South rose a comparable 3.6% for the month at an annual rate of 2.31 million, 3.1% above January 2016. Locally, Beverly-Hanks reported in our 2016 EOY Market Report an existing-home sales increase of 4.5% YOY.
NAR’s chief economist, Lawrence Yun, says this signals that rising interest rates are not enough to dampen consumer resilience:
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home. Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”
Median Home Prices
While sales have seen some fits and starts in recent months, YOY home prices continue to climb steadily each month. The U.S. January median existing-home price for all housing types (single-family homes, townhomes, condominiums, and co-ops) was $228,900, a 7.1% increase from January 2016 ($213,700). January now marks the 59th consecutive month of year-over-year gains.
Regionally, the median price in the South was $201,400, up 9.2% from one year ago. Locally, Beverly-Hanks reported in our 2016 EOY Market Report a median regional sales price of $225,000, up 7.1% from $210,000 at the end of 2015.
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|
Region |
Median Home Price
(Jan. 2017) |
Median Price Increase
(Jan. 2016 to Jan. 2017) |
|
U.S. |
$228,900 |
+7.1% |
|
South |
$201,400 |
+9.2% |
|
WNC |
$225,000 (EOY) |
+7.1% (EOY) |
______________________________________________________________________________________
Housing Inventory
Slugging behind sales pace and prices, the tight housing market remains reflected in January’s total housing inventory. Total housing inventory at the end of January did rise 2.4%, but is still 7.1% lower than a year ago. This is the 20th consecutive month of year-over-year declines in inventory. Properties on the market sold in an average of 50 days during this period, down from 52 days in December.
Housing supply is only projected to tighten as the market warms up with the spring, which does not bode well for lower income and first-time buyers. Yun said, “Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range.” He continued:
“NAR and realtor.com®’s new ongoing research—the Realtors® Affordability Distribution Curve and Score—revealed that the combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.”
Mortgage Rates
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased slightly in January. Rates are now 4.15% compared to 4.20% in December. The average commitment rate for all of 2016 was 3.65%.
NAR President William E. Brown says it is important for government-sponsored enterprises (GSEs) to keep a check on burdensome fees:
“Supply and demand imbalances continue to be burdensome in many markets, and now Fannie Mae is supporting a Wall Street firm’s investment in single-family rentals. This will only further hamper tight supply and put major investors in direct competition with traditional buyers. Instead, the GSEs should lower overly burdensome fees and help qualified borrowers become homeowners.”
Read more about existing-home sales on NAR. Locally, homes sales are mirroring many of the national trends. View the Beverly-Hanks End-of-Year Market Report to see how home sales are growing in your community.
