According to the National Association of Realtors®, existing-home sales increased in January, reversing a downward trend from the prior month.
Existing home sales jumped 6.7% in January from a month ago to an annualized rate of 6.50 million units, according to the National Association of Realtors, this is the highest rate in a year. Sales dropped 2.3% from the same month the previous year. The number of homes sold last December was reduced from 6.18 million down to 6.09 million, according to revised figures. Analysts expected a 1.3% dip in month-over-month sales to 6.1 million units, but the results were far better.
“Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, NAR’s chief economist. “Consequently, housing prices continue to move solidly higher.”
At the end of January, the inventory of unsold existing homes plummeted to a new all-time low of 860,000 units, down 2.3% from December and 16.5% from a year ago (1.03 million). At the current sales rates, unsold inventory is already at a 1.6-month supply, which is also an all-time low, down from 1.7 months in December and 1.9 months in January 2021. For all types of homes, this is a new low since the NAR began recording the data in 1999.
"The inventory of homes on the market remains woefully depleted, and in fact is currently at an all-time low," Yun said.
According to Yun, homes listed at $500,000 and lower are disappearing while supply has grown in the upper price range. As a result of these increases, he forecasts that the mix of buyers will continue to migrate toward high-income consumers.
"There are more listings at the upper end – homes priced above $500,000 – compared to a year ago, which should lead to less hurried decisions by some buyers," Yun added. "Clearly, more supply is needed at the lower end of the market in order to achieve more equitable distribution of housing wealth." In Chattanooga real estate, we are seeing the lower and upper ends of the market with constrained inventory.
In January, first-time homebuyers accounted for 27% of transactions, down from 30% in December and 33% in January 2021. According to the National Association of Realtors' 2021 Profile of Home Purchasers and Sellers, which was released in late 2021, the annual share of first-time buyers was 34%.
According to Yun, the expected increase in mortgage rates would be problematic for at least two market segments.
"Some moderate-income buyers who barely qualified for a mortgage when interest rates were lower will now be unable to afford a mortgage," he said. Consumers in expensive markets, such as California and the New York City metro area, will feel the sting of nearly an additional $500 to $1000 in monthly payments due to rising rates." he added.
The Chattanooga homes for sale have slowed mildly in March as the conflict with Ukraine has escalated. I anticipate that the market will speed up again soon with spring buyers but will not be as good as it could have been with the low inventory of homes that we have available on the market.
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Article Source: https://www.nar.realtor/