Existing-home sales rise even as prices hit record high

 Key takeaways
Existing-home sales in January 2024 rose 3.1 percent from December but remain down 1.7 percent from a year ago, according to the National Association of Realtors.
The nationwide median sale price was $379,100, up 5.1 percent from 2023 and a record high for January.
Inventory in January stood at a 3.0-month supply, a level considered a seller's market.

The housing market continued to challenge homebuyers and reward sellers even in the typically slow month of January, a new report by the National Association of Realtors (NAR) shows. On the bright side, sales of existing homes — previously occupied properties, rather than newly built homes — saw an uptick as more listings hit the market.

“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 NAR chief economist Lawrence Yun. “Listings were modestly higher, and homebuyers are taking advantage of lower mortgage rates compared to late last year.”

While mortgage rates are lower now than the 8 percent milestone we saw in October, they are still relatively high: an average of 7.13 percent for a 30-year fixed-rate loan as of Feb. 21, according to Bankrate’s most recent survey of large lenders. That, combined with stubbornly high prices, means affordability challenges remain daunting for homebuyers. The share of first-time homebuyers in particular fell to 28 percent in January, down from 31 percent in January of last year.

 The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates. — Mark Hamrick, Bankrate Senior Economic Analyst 

“The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates, as well as the health of the broader economy,” says Mark Hamrick, Bankrate’s senior economic analyst. “The market could benefit from a combination of tailwinds, if they were to develop and are sustained.”

Existing-home sales tick upward

The existing-home sales statistic counts all completed sales of non-new-construction homes, including single-family houses, condos, townhouses and co-ops. According to NAR, the number of sales nationally rose 3.1 percent month-over-month to an annual pace of 4.0 million homes in January 2024. Even with the slight uptick, that’s still a decrease of 1.7 percent year-over-year.

Sales in the West were up 4.3 percent from a month ago and 2.8 percent from a year ago. In the South, sales rose 4.0 percent for the month but declined 1.6 percent for the year. In the Northeast, sales were unchanged for the month and down 5.9 percent year-over-year, while sales in the Midwest increased 2.2 percent monthly but decreased 3.1 percent annually.

Days on market

Properties typically remained on the market for 36 days in January, a significant increase from 29 days in December. In January 2023 that figure was 36 days. This time frame will likely speed up as we enter spring and summer, typically the most active season for homebuying.

Home prices rise for seventh consecutive month

The nationwide median sale price for existing homes in January clocked in at $379,100, up 5.1 percent from last year and the seventh month in a row to record year-over-year increases. In fact, this was the highest-priced January on record, according to NAR. “The median home price reached an all-time high for the month of January,” Yun said. “Multiple offers are common on mid-priced homes. The elevated share of cash deals — 32 percent — indicated a market propelled by record-high housing wealth.”

 The median home price reached an all-time high for the month of January. — Lawrence Yun, Chief Economist, National Association of Realtors 

In June 2022, the median price hit its highest-ever recorded price at $413,800. The U.S. housing market had been on a remarkable run of 131 consecutive months of year-over-year median sale price increases — the longest-running streak since NAR started keeping records — before finally dropping year-over-year in February 2023.

All four major regions once again saw annual price increases in January. The West continued to have the highest median price by far at $572,100, up 6.3 percent from a year ago. In the Northeast, the median rose 10.1 percent from a year ago to $434,300. The South’s median price rose 4.1 percent to $345,100, and the Midwest’s median rose 7.6 percent to $271,700.

Housing inventory remains low

Total housing inventory — the overall number of homes on the market for sale — sat at 1.01 million units at the end of January. That’s a slight improvement, up 2.0 percent from December and 3.1 percent from a year ago. Even so, it represents only a 3.0-month supply, which is still well short of the five to six months typically required for a healthier, more balanced market.

The sharp rise in mortgage rates seen this past fall has kept many homeowners from selling, which keeps existing homes off the market. Those who locked in rates at 3 percent several years ago aren’t keen on moving with current rates more than double that.