Existing Home Sales Rise Slightly, Prices Follow

House for Sale
House for Sale

The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in January rose 0.4% to 4.92 million from a downwardly revised total of 4.9 million in December. Sales are up 9.1% year-over-year for the month of January.

Existing home sales were slightly above the consensus estimate of 4.9 million on a seasonally adjusted annual basis.

Housing inventory continues to fall. In January, the decrease came to 4.9%, a supply of 4.2 months, compared with December's 4.5 month supply. Inventories are now equal to supply in April 2005. Listed inventory is down 25.3% year-over-year, and raw unsold inventory totals 1.71 million homes, the lowest level since 1999.

NAR's chief economist said:

We expect a seasonal rise of inventory this spring, but it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth

According to the NAR, the national median existing home price in December was $173,600, up 12.3% compared with January 2012, and the eleventh consecutive month to see a price gain.

Foreclosed and short sales accounted for 23% of January sales, down from 24% in December, and below the 35% share in January 2012. Foreclosures sold at an average 20% discount to the December median price, while short sales sold at a discount of 12%.

The low inventory continues to boost prices and that situation could continue until the spring selling season kicks off late next month.

Filed under: 24/7 Wall St. Wire, Housing, Research