Sales of existing homes in the US climbed in January, pushed up by buyers who were encouraged to make a purchase by falling mortgage rates. But the surge may be short-lived if rates extend a post-January climb.
Existing home sales (not newly-constructed homes) — which include single-family homes, townhomes, condominiums and co-ops — beat expectations, rising 3.1% in January from the prior month to a seasonally adjusted annualized rate of four million units, according to a report from the National Association of Realtors.
Compared to a year ago, when sales were at a 4.07 million pace, sales were down 1.7%.
“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said Lawrence Yun, chief economist at NAR. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”
With a return of eager buyers to the market, the cost of homes also went up. The median cost for a home jumped 5.1% from a year ago to $379,100, the seventh straight month of annualized price gains. January is usually a sleepier month for home sales, but prices for the month reached a record high.
“Multiple offers are common on mid-priced homes, and many homes were still sold within a month,” said Yun. “The elevated share of cash deals — 32% — indicated a market full of multiple offers and propelled by record-high housing wealth.”
After reaching a high last year of 7.79%, the average rate for a 30-year, fixed-rate mortgage has dropped. The rate remained around 6.6% for more than a month, although it has been trending higher over the past few weeks.
This is a developing story and will be updated.
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