NAR: ‘Home Prices are Bottoming Out;’ Existing-Home Sales Fell 3.8% in Northeast
Real Estate In-Depth | February 22, 2023
WASHINGTON—Existing-home sales fell for the 12th straight month in January, according to a report released on Feb. 21 by the National Association of Realtors. Month-over-month sales were mixed among the four major U.S. regions, as the South and West registered increases, while the East and Midwest experienced declines. All regions recorded year-over-year declines.
Total existing-home sales slid 0.7% from December 2022 to a seasonally adjusted annual rate of 4.00 million in January. Year-over-year, sales retreated 36.9% (down from 6.34 million in January 2022).
“Home sales are bottoming out,” said NAR Chief Economist Lawrence Yun. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”
Total housing inventory registered at the end of January was 980,000 units, up 2.1% from December and 15.3% from one year ago (850,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.
“Inventory remains low, but buyers are beginning to have better negotiating power,” Yun added. “Homes sitting on the market for more than 60 days can be purchased for around 10% less than the original list price.”
The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300), as prices climbed in three out of four U.S. regions, while falling in the West. This marks 131 consecutive months of year-over-year increases, the longest-running streak on record.
Properties typically remained on the market for 33 days in January, up from 26 days in December and 19 days in January 2022. Fifty-four percent of homes sold in January were on the market for less than a month.
First-time buyers were responsible for 31% of sales in January, identical to December but up from 27% in January 2022. NAR’s 2022 Profile of Home Buyers and Sellers—released in November 2022—found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022.
Individual investors or second-home buyers, who make up many cash sales, purchased 16% of homes in January, unchanged from December but down from 22% in January 2022.
Distressed sales—foreclosures and short sales— represented 1% of sales in January, identical to last month and one year ago.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.32% as of February 16. That’s up from 6.12% from the previous week and 3.92% one year ago.
Single-Family and Condo/Co-op Sales
Single-family home sales declined to a seasonally adjusted annual rate of 3.59 million in January, down 0.8% from 3.62 million in December and 36.1% from one year ago. The median existing single-family home price was $363,100 in January, up 0.7% from January 2022.
Existing condominium and co-op sales were recorded at a seasonally adjusted annual rate of 410,000 units in January, unchanged from December but down 43.1% from the previous year. The median existing condo price was $320,000 in January, an annual increase of 5.2%.
“Realtors help consumers realize the American dream of property ownership, both residential and commercial,” said NAR President Kenny Parcell, a Realtor from Spanish Fork, UT, and broker-owner of Equity Real Estate Utah. “A Realtor possesses trusted expertise and a thorough understanding of local market conditions that prove valuable throughout the entire real estate transaction.”
Existing-home sales in the Northeast retracted 3.8% from December to an annual rate of 500,000 in January, down 35.9% from January 2022. The median price in the Northeast was $383,000, up 0.3% from the previous year.
In the Midwest, existing-home sales slid 5.0% from the previous month to an annual rate of 960,000 in January, declining 33.3% from one year ago. The median price in the Midwest was $252,300, up 2.7% from January 2022.
Existing-home sales in the South rose 1.1% in January from December to an annual rate of 1.82 million, a 36.6% decrease from the prior year. The median price in the South was $332,500, an increase of 3.4% from one year ago.
In the West, existing-home sales elevated 2.9% in January to an annual rate of 720,000, down 42.4% from the previous year. The median price in the West was $525,200, down 4.6% from January 2022.