“While home sales are still significantly lower than they were a few years ago, January’s monthly increase is the beginning of an expansion in supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings are up slightly and homebuyers are taking advantage of lower mortgage rates compared to the end of last year.”
The inventory of homes for sale in January increased by 3.1% from January 2023 to 1.01 million units, but the three-month supply is still small. A six-month period is considered a balanced market between buyers and sellers.
This dynamic is why the market continues to put pressure on housing prices. The median existing home price for all housing types in January was $379,100, an increase of 5.1% from the same month last year and a record high for January.
Prices rose in all four U.S. regions, with 16% of homes sold above list price.
“Multiple offers were common for mid-priced homes, and many homes still sold within a month. and is driven by record housing wealth,” Yun said. .
The all-cash ratio was 32%, up from 29% in December and January 2023. This is also the highest level in almost 10 years since June 2014.
First-time buyers accounted for only 28% of sales. Historically they make up about 40%, but the lack of affordable housing for sale is hitting them the hardest.
Lower mortgage rates helped boost sales in January, but today’s rise in interest rates is already weighing on the market again. In a separate report from Redfin, the number of new listings rose 10% year over year in the four weeks ending February 18, the largest increase in two months. However, the report said contracts signed were down 7% compared to a year ago.
Correction: Total cash as a percentage of home sales in January 2024 was 32%, up from 29% in January 2023. A previous version of this article incorrectly stated the comparison.
