By Christine Huang
Existing-home sales leapt to a seasonally-adjusted annual rate of 5.69 million in January, up 3.3 percent from an upwardly revised 5.51 million annual rate in December 2016, beating estimates of economists polled by Bloomberg.
The National Association of Realtors reported that total sales of pre-owned homes in January was up 3.8 percent from last January and marks the highest number of sales since February 2007, when sales hit an annual rate of 5.79 million. Every region except the Midwest enjoyed sales growth.
“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,” said Lawrence Yun, chief economist of NAR, in a press release.
“This report reflects the resiliency of the housing market itself,” said David Nice, senior economist at Diane Swonk Economics, in an interview. “We’re so many years into the recovery that people are now confident the housing market is on firmer footing,”
Although the general trend in home sales is expected to stay positive, tight supply and rising prices remain headwinds, Brian Wesbury, chief economist at First Trust Advisors, wrote on the firm’s blog.
Nice also pointed to rising interest rates as a potential challenge. “If rates stay elevated, we can see a slowdown in growth trajectory,” he said. If supply remains tight, however, sales will likely outpace inflation, he explained.
At the pace of January’s sales, it would have taken 3.6 months to sell all the homes in December’s inventory. Wesbury noted on the blog that the NAR considers anything less than 5.0 months tight supply.
The median price for pre-owned homes in January was $228,900, up 7.1 percent from a year ago.
Single-family home sales increased 2.6 percent to a seasonally adjusted rate of 5.04 million, compared with 4.86 million a year ago. The median existing single-family home price was $230,400, marking a 7.3 percent increase from the previous year.
Sales of pre-owned condominiums and co-cops rose 8.3 percent to a seasonally adjusted annual rate of 650,000 units. The median existing condo price was $217,400, up 6.2 percent from January 2016.