January existing-home sales drop as confidence wanes
Existing-home sales fell 6.6% to a seasonally adjusted annual rate of 4.65 million units in January from a pace of 4.98 million units in December. However, last month's sales activity was 2.4% above the 4.54-million unit pace in January 2000.
Dr. David Lereah, NAR's chief economist, said the slide in consumer confidence outweighed the benefits of lower interest rates. “For two consecutive months we've had big drops in existing home sales -- this results from a decline in consumer confidence and the deteriorating economy,” he said. “Although home sales remain strong in comparison with other sectors of the economy, we think lower mortgage interest rates will keep the market from sinking into a serious decline.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 7.03% in January, down from 7.38% in December. It stood at 8.21% in January 1999.
Housing inventory levels fell 1.4% at the end of January with 1.38 million existing homes available for sale, which represents a 3.6-month supply at the current sales pace. However, inventory levels are 38% higher than the record low of 1.00 million homes available in January 2000.
The national median existing-home price was $136,600 in January, up 2.7% from January 2000 when the median price was $133,000. The median is a midpoint signifying that roughly half of the homes sold for more and half sold for less.
Regionally, home resales in the West fell 9.9% in January to an annual rate of 1.28 million units. However, that pace was 14.3% above January 2000. The median existing-home price in the West was $175,500, up 1.9% from the same month a year earlier.
Existing-home sales in the Northeast fell 8.2% from December to a pace of 560,000 units in January; the rate was 3.4% below January 2000. The median existing-home price in the Northeast was $143,400, up 8.1% from a year ago.
The existing-home sales pace in the South dropped 6.8% in January to an annual rate of 1.79 million units; however, they were 0.6% above January 2000. The median price of an existing home in the South was $127,700, which was 7.5% higher than a year ago.
In the Midwest, existing homes were selling at an annual rate of 1.02 million units in January, down 1% from December. The pace was 3.8% below January 2000. The median price in the Midwest was $122,100, up 0.9% from January 2000.