Economic Buzz: US Existing Home Sales Fall More Than 3% In January

Economic Buzz: US Existing Home Sales Fall More Than 3% In January

The Ohio Association of Realtors said Wednesday that sales of new and previously owned homes declined from December and were down 3.3 percent from January of 2017.

Sales were 4.8% down from January 2017, the largest annual drop since August 2014 (5.5%) and were at the slowest pace since September 2017 (5.37 million).

Home-price increases have outpaced wage growth, which has stubbornly remained below 3 percent annually despite the unemployment rate dropping to a 17-year low of 4.1 percent.

Washington, Jumada II 5, 1439, February 21, 2018, SPA - Sales of existing US homes fell unexpectedly for a second consecutive month in January, hurt by a persistent shortage of houses that is elevating prices and keeping first-time homebuyers out of the market, an industry group reported Wednesday.

The Realtors said that unsold inventory - the supply of available homes - would sell out in only 3.4 months, based on the current pace of purchasing. "There was a nice jump in new home construction in January and homebuilder confidence is high".

"Another month of solid price gains underlines this ongoing trend of strong demand and weak supply". There now is a 3.4-month supply of inventory compared to January 2017's 3.6 months. Economists often describe a "balanced" market as one with five to seven months worth of inventory.

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Real estate agents told the national trade association that they're hearing from and seeing more interested buyers.

The national Realtors report median, or middle, prices rather than averages. The average 30-year fixed was just below 4 per cent in early January. Four percent of January sales were foreclosures and 1 percent were short sales. "With demand exceeding supply in most areas, competition will only heat up in the months ahead". Porter County's sales fell 9 percent to 121, while the median price rose 5.8 percent to $190,500.

Existing condominium and co-op sales rose 1.6 percent to a seasonally adjusted annual rate of 620,000 units in January, but are still 4.6 percent below a year ago.

The drop was surprising given that pending home sales increased slightly over the past two months, which typically predicts an uptick in existing home sales.

First-time buyers were 29 percent of sales in January, which is down from 32 percent in December 2017 and 33 percent a year ago. The median price in the Midwest was $188,000, up 8.7 percent from a year ago. The median price in the West was $362,600, up 8.8 percent from January 2017.

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