Existing-Home Sales Grow in January, Rising 3.1%

Key takeaways:

• January existing-home sales increased 3.1% month-over-month, while declining 1.7% annually
• The nationwide median existing-home sales price in January was $379,100 — a 0.9% decrease from December but a 5.1% increase from the previous year
• Sellers still have the market advantage in regards to inventory, but unsold existing homes grew 2% month-over-month to a 3.0-month supply

Existing home sales tick up in 2024

Existing-home sales increased 3.1% in January compared to the previous month, according to the National Association of Realtors (NAR). However, the metric dropped 1.7% year-over-year.

Meanwhile, the median existing-home sales price reached $379,100. That inched down 0.9% from December’s $382,600 but grew 5.1% annually from $360,800.

“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand. Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year,” said NAR Chief Economist Lawrence Yun.

“The median home price reached an all-time high for the month of January. Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.”

Regionally, the South had the most existing-home sales in January, with an annual rate of 1.84 million units. That increased 4% from December while it trailed January 2023 by 1.6%. The median price grew 4.1% (annually) and hit $345,100.

The West’s 730,000 existing sales saw the largest growth, expanding 4.3% monthly and 2.8% yearly. Typically the costliest part of the country, the median price increased 6.3% to $572,100.

The final two regions had comparatively tepid sales numbers but higher price increases to start 2024. The Midwest’s 950,000 units was good for a 2.2% bump month-over-month but dropped 3.1% annually. Its median price rose 7.6% to $271,700.

The Northeast’s 480,000 sales held steady from December but dipped 5.9% year-over-year. The median price, however, jumped 10.1% to $434,300.

Factors influencing the market

NAR Chief Economist Lawrence Yun has pointed to two significant factors impacting existing-home sales: low for-sale inventory and high mortgage rates.

Given the ongoing lack of supply, properties on the market still receive multiple offers, especially starter- and mid-priced homes, he said. Although we saw plenty of interest rate growth in 2023, the average 30-year fixed rate mortgage (FRM) came down every month from October 2023 to January 2024. With inflation dissipating, it’s possible the recent interest rate descension is a harbinger of things to come.

“Existing home sales will continue to be constrained in the foreseeable future as the supply of homes remains tight and sellers continue to wait for lower mortgage rates,” said CoreLogic Chief Economist Dr. Selma Hepp. “All eyes are on the Fed now to cut rates this summer in order to provide relief to the buyers as well as stubborn sellers. Should they do so, existing home sales should expect a better outlook for the remainder of the year.”

Other notable data from the report showed January’s housing inventory hit a 3.0-month supply at the current pace of sales. That edged down from December’s 3.1 months and inched up from January 2023’s 2.9 months. Traditionally, six months worth of inventory defines a balanced housing market.

Additionally, time on market stretched to 36 days in January, up from 33 days the year prior. All-cash buyers accounted for 32% of existing home sales for the month, up from 29% year-over-year.

Navigating the housing market

Embarking on the journey to homeownership is an exciting and significant step in one’s life. To help you navigate this path successfully, we’ve compiled three practical tips:

1. Stay on top of housing inventory: Keep an eye on changes in inventory levels, as this can impact your choices and negotiation power. Be ready to act when the right opportunity arises.
2. Assess your budget and financing options: With low housing affordability being a factor in declining sales, it’s crucial to evaluate your financial circumstances. Explore different financing options and ensure that you find a home that aligns with your budget and long-term financial goals.
3. Be proactive and act quickly: When you find a home that meets your criteria, be proactive and act quickly to avoid missing out. The best way to do so is by securing a mortgage prequalification in advance.

The bottom line

As a homebuyer, navigating the current real estate market can feel overwhelming at times. But armed with the right knowledge, you can approach the process with confidence.

Stay informed about the latest trends, assess your budget, explore down payment assistance programs in your area, and act quickly when you find the right home.