U.S. Existing Home Sales Drop 1.3% in January
February 21 2020 - 10:30AM
Dow Jones News
By Harriet Torry and Eric Morath
WASHINGTON-Sales of previously owned U.S. homes sputtered in
January amid high prices and limited supply.
Existing home sales decreased 1.3% in January compared with
December at a seasonally adjusted annual rate of 5.46 million, the
National Association of Realtors said Friday.
That compared with economists' expectations for a 2% decline
last month.
"Home sales are just moving sideways, not really breaking out
higher even though the economic backdrop is very favorable," said
Lawrence Yun, the NAR's chief economist, citing a lack of housing
inventory.
Existing-home sales were up 9.6% in January from a year earlier.
A persistent drag on the housing market has been a dearth of
inventory.
At the current sales pace, there was a 3.1-month supply of homes
on the market at the end of January compared with 3.8 at the same
time in the previous year. Limited housing stock has contributed to
higher home prices, with the median sales price for an existing
home in January up 6.8% from the prior year at $266,300.
NAR said the housing inventory level was the lowest for January
since 1999. Inventory has been tight at the cheaper end of the
market. Homes priced from $100,000 to $250,000 saw a 10.3% drop in
inventory from a year earlier in January. Meanwhile, homes in the
$250,000 to $500,000 range saw inventory fall 6%.
Some positive signs have emerged that suggest more inventory
could soon flow onto the market.
Residential permits, which can be a bellwether for future home
construction, rose 9.2% from the previous month in January, the
Commerce Department said Wednesday, hitting a 13-year high.
A measure of U.S. home-builder confidence eased for the
second-straight month in February, to 74 from 75 in January, but
remained near a two-decade high, the National Association of
Homebuilders said Tuesday.
Low joblessness is one factor supporting demand for home buying.
The U.S. unemployment rate was 3.6% in January, close to a 50-year
low. Consumer confidence also remains high.
Furthermore, borrowing conditions for homeowners are generally
better than a year ago. The average interest rate on a 30-year fixed
mortgage was 3.62% in January, according to Freddie Mac, well below
the 4.46% in January last year.
News Corp., owner of The Wall Street Journal, also operates
Realtor.com under license from the National Association of
Realtors.
(END) Dow Jones Newswires
February 21, 2020 10:15 ET (15:15 GMT)
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