Feb. 23, 2012 – Existing-home sales in January grew to their highest levels in 18 months, reinforcing NAFCU’s view that the housing market will continue to heal as the jobs picture gets better.
The National Association of Realtors reported Wednesday that existing-home sales in January rose 4.3 percent to 4.57 million units on a seasonally adjusted, annualized basis. NAFCU Staff Economist Curt Long said distressed sales drove the increase. “Foreclosures and short sales constituted 35 percent of total sales, up from 32 percent in December,” he noted.
Sales of single family homes rose 3.8 percent in January, while sales of condominiums increased 8.3 percent. Every housing region reported positive sales growth, with the West reporting the strongest increase (8.8 percent), followed by the South (3.5 percent), the Northeast (3.4 percent) and Midwest (1 percent).
On a year-over-year basis, existing-home sales were up 0.7 percent. “In the coming months, we should see more substantial year-over-year increases since last year’s sales pace fell sharply in February before bottoming out in July,” Long said.
The median home price of an existing home, non-seasonally adjusted, decreased 4.6 percent to $154,700 from the previous month and was down 2 percent from January 2011.
The months that homes were available for sale decreased from 6.4 months of supply in December to 6.1 months of supply in January. The inventory level decreased 0.4 percent from December and fell 20.6 percent from a year ago, leaving 2.31 million unsold homes in the market.
Long noted that the supply of unsold homes is at its lowest point in nearly seven years. “The ratio of inventory level to sales is now considered to be at a normal level and suggests that supply and demand in the existing-home sales market is balanced,” he said.
If the European sovereign debt crisis and rising gas prices do not impede the U.S. economic recovery, home sales should continue to improve as long as the labor market keeps strengthening, the economist added.