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Home Sales · Housing Market · Inventory · Mortgage Rates
Existing home sales unexpectedly fell 4.9% in January from December's levels, according to National Association of Realtors (NAR) data, as elevated mortgage rates and high prices deterred buyers despite an increase in available inventory.
The decline in sales to fewer than expected by economists surveyed by The Wall Street Journal and Dow Jones Newswires marks the first slowdown in four months, raising questions about housing market momentum. Inventory, however, increased 3.5% from the previous month, with 1.18 million units available, up 16.8% year-over-year.
Despite this improved supply, the median existing home price rose almost 5% from a year ago to $396,900, and mortgage rates remain near 7%. NAR Chief Economist Lawrence Yun states that both increased inventory and lower mortgage rates are necessary for consumers to purchase homes.
BMO Senior Economist Priscilla Thiagamoorthy notes that potential buyers are reluctant due to poor affordability, while would-be sellers are unwilling to forfeit favorable pandemic-era mortgage terms. Oxford Economics lead U.S. economist Nancy Vanden Houten does not expect prices to soften significantly, indicating many buyers will remain priced out.
