Existing-home sales pick up in January

Total existing-home sales – including single-family, townhomes, condominiums and co-ops – increased 3 percent to a seasonally adjusted annual rate of 6.46 million units in January from an upwardly revised pace of 6.27 million in December, according to data released by NAR Feb. 27. Sales were 4.3 percent below the 6.75 million-unit level posted in January 2006.

Observers, however, should be careful not to overreact to the sales gain or to other short-term effects, said NAR Chief Economist David Lereah.

“Although we’re expecting existing-home sales to gradually rise this year, and buyers are responding to the price correction, some unusually warm weather helped boost sales in January,” he said in a news release. “On the flip side, the winter storms that disrupted so much of the country in February could negatively impact the housing market.”

Lereah added that a sales dip in light of weather events is expected, but he said recovery will follow.

Total housing inventory levels rose 2.9 percent at the end of January to 3.55 million existing homes available for sale, which represents a 6.6-month supply at the current sales pace – unchanged from the revised December level. Supplies peaked at 7.4 months in October.  “Inventories are looking better, but price softness should continue until spring when the market is expected to become more balanced,” Lereah said.

The national median existing-home price for all housing types was $210,600 in January, down 3.1 percent from January 2006 when the median was $217,400.  The median is a typical market price where half of the homes sold for more and half sold for less.

“The market is trending up from its low last fall, and that is important in restoring confidence to buyers who’ve been on the sidelines,” said NAR President Pat Vredevoogd Combs in a news release.  “Since buyers can find more favorable terms, and they are looking for a place to call home for some years to come, getting into the market now makes sense … .”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.22 percent in January, up from 6.14 percent in December; the rate was 6.15 percent in January 2006.

zIn the Midwest, existing-home sales increased 4.8 percent in January to a level of 1.53 million, and were 0.6 percent lower than January 2006. The median price in the Midwest was $162,600, which is 3.5 percent below a year ago.