The numbers: Sales of existing homes in the United States increased 0.6% to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors reported on Friday. Compared to the previous year, home sales increased 23.7%.
Economists polled by The Wall Street Journal predicted that sales of existing homes would fall to an average rate of 6.66 million.
What happened: The average price of an existing home rose to $ 303,900 in January, an increase of 14.1% over the previous year.
The stock of homes for sale fell to a record 1.04 million units in late January. This is a 25.7% drop year on year. The market had a 1.9 month supply of houses for sale. A 6-month supply is considered a sign of a balanced market.
The South and Midwest regions showed an increase in sales in January.
General picture: Sales have been moving sideways since reaching a bullish cycle in October. Economists believe that low mortgage rates will continue to drive demand for real estate in the coming months. Buyers are also looking for more space and more remote locations after the pandemic.
What the NAR said: “Home sales continue to rise in the first month of the year, as buyers quickly snatch practically all new listings that hit the market. Sales could easily have been up to 20% higher if there were more inventory and more options, ”said Lawrence Yun, chief economist at NAR.
What are economists saying? “In general, record low mortgage rates and families fleeing crowded housing situations are fueling demand for single-family homes, despite continued labor market turmoil and higher house prices. In fact, this is an industry that is coming out of the crisis stronger than it entered, ”said Josh Shapiro, chief economist at MFR Inc.
Market reaction: US stocks opened higher on Friday with the S&P 500 SPX index,
up to 12.48 points in the middle of the day, after falling in the last three trading sessions.