Sales of existing homes across the country fell 3.2 percent in January compared to December and 4.8 percent versus last January. The decline was consistent in all major regions, according to a monthly report out today from the National Association of Realtors. The decline mirrors softer sales seen locally, as reported earlier this month by North Phoenix News and In&Out Magazine.
The declines are not for lack of demand. Rather, there simply aren’t enough houses on the market, and rising prices are making it more difficult for those in lower income brackets to find a home they can afford, analysts say.
“The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month,” said Lawrence Yun, NAR chief economist. “It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
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Buyer demand is stronger than this time last year in many locales, Yun said.
The median price for existing-homes—including single-family homes, townhomes, condominiums and co-ops—was $240,500 in January, up 5.8 percent from January 2017, according to the NAR report. It’s the 71st straight month of year-over-year gains.
Inventory was up slightly in January to a 3.4-month supply, which is still 9.5 percent lower than a year ago. Less than six months is considered a “seller’s market.”
“The underproduction of single-family homes over the last decade has played a predominant role in the current inventory crisis that is weighing on affordability,” Yun said. “However, there’s hope that the tide is finally turning. There was a nice jump in new home construction in January and homebuilder confidence is high. These two factors will hopefully lay the foundation for the building industry to meaningfully ramp up production as this year progresses.”