Existing-home sales began 2017 with a bang, growing 3.3 percent and hitting a 10-year high in January, according to the National Association of REALTORS® (NAR). With the exception of the Midwest, every region saw gains, with total sales reaching 5.69 million—the fastest pace since February 2007.
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” says Lawrence Yun, NAR chief economist. “Market challenges remain, but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions.”
The median existing-home price also rose again in January, up 7.1 percent to $228,900 from $213,700 one year prior, according to the report. The median existing condominium and single-family home prices grew, as well: 6.2 percent to $217,400 and 7.3 percent to $230,400, respectively.
The report shows that though existing-home inventory expanded 2.4 percent to 1.69 million, supply is still 7.1 percent lower than one year prior. Months supply of inventory is currently 3.6. Existing homes averaged 50 days on the market, down from 64 days one year prior—38 percent of homes sold, however, were on the market for less than a month. Realtor.com® data show the markets with the shortest days on market were San Jose-Sunnyvale-Santa Clara, Calif. (43 days), San Francisco-Oakland-Hayward, Calif. (47 days), San Diego-Carlsbad, Calif. (55 days), Seattle-Tacoma-Bellevue, Wash. (57 days) and Nashville-Davidson-Murfreesboro-Franklin, Tenn., Vallejo-Fairfield, Calif., and Greeley, Colo. (58 days).
Existing-home sales in the West, according to the report, soared 6.6 percent in January, while sales in the Northeast jumped 5.3 percent and sales in the South rose 3.6 percent. Sales in the Midwest fell 1.5 percent. The median price in the West was $332,300 (a 6.8 percent annual increase); the median price in the Northeast was $253,800 (2.5 percent); the median price in the South was $201,400 (9.2 percent); and the median price in the Midwest was $174,900 (6.5 percent).
First-time homebuyers comprised 33 percent of existing-home sales in January—an uptick from 32 percent in December and one year prior. All-cash sales comprised 23 percent, while distressed sales comprised 7 percent—both dips from one year prior.
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” Yun says. “NAR and realtor.com’s new ongoing research—the REALTORS® Affordability Distribution Curve and Score—revealed that the combination of higher rates and prices led to households in over half of all states last month being able to afford less of all active inventory on the market based on their income.”