Reaching a continuous 12-month decline, total existing-home sales, or completed transactions that include single-family homes, townhomes, condominiums, and co-ops, dipped 0.7% in January to a seasonally adjusted annual rate of 4 million, the National Association of Realtors (NAR) reports.
Among the four major U.S. regions, month-over-month sales increased in the South and West, while the East and Midwest registered declines. All four regions posted year-over-year declines as existing-home sales dropped 36.9%, down from 6.34 million in January 2022.
“Home sales are bottoming out,” says NAR chief economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
The total housing inventory is up 2.1% from December at 980,000 for the end of January—the equivalent of 2.9 months supply at the current monthly sales pace. The supply was unchanged from December, but up 1.6 months from January 2022.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun adds. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
For all housing types, the median existing-home sales price increased 1.3% from one year ago to $359,000, marking 131 consecutive months of year-over-year increases—the longest streak on record. Prices climbed in three of the four regions, falling only in the West.
Up from 26 days in December and 19 days in January, properties typically remained on the market for 33 days in January, with 54% of homes sold in January being on the market for less than a month.
First-time buyers were responsible for 31% of sales in January, identical to December but up from 27% in January 2022. All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022. Unchanged from December but down from 22% in January 2022, individual investors, or second-home buyers, who make up many cash sales, purchased 16% of homes in January. Foreclosures and short sales represented 1% of sales in January, identical to December and one year ago.
“Home sales have slowed dramatically in the last three months as would-be buyers struggle with affordability and homeowners keep their homes off the market. Higher mortgage rates are responsible for damping demand because they raise monthly payments and reduce affordability. But higher rates keep homes off the market, too, because owners don’t want to get stuck with outsize monthly payments on their next homes,” says Holden Lewis, home and mortgage expert, NerdWallet. “Nationally, prices have fallen seven months in a row, and they likely would have fallen further if not for the restricted supply of homes for sale.”
Single-family home sales declined to a seasonally adjusted annual rate of 3.59 million in January, down 0.8% from 3.62 million in December and 36.1% from one year ago. The median existing single-family home price was $363,100 in January, up 0.7% from January 2022.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 410,000 units in January, unchanged from December but down 43.1% from the previous year. The median existing condo price was $320,000 in January, an annual increase of 5.2%.
Regionally, existing-home sales in the Northeast retracted 3.8% from December to an annual rate of 500,000 in January, down 35.9% from January 2022. The median price in the Northeast was $383,000, up 0.3% from the previous year.
The Midwest’s existing-home sales slid 5% from the previous month to an annual rate of 960,000 in January, declining 33.3% from one year ago. The median price in the Midwest was $252,300, up 2.7% from January 2022.
In the South, existing-home sales rose 1.1% in January from December to an annual rate of 1.82 million, a 36.6% decrease from the prior year. The median price in the South was $332,500, an increase of 3.4% from one year ago.
Existing-home sales in the West increased 2.9% in January to an annual rate of 720,000, down 42.4% from the previous year. The median price in the West was $525,200, down 4.6% from January 2022.
