According to the National Association of Realtors (NAR), existing home sales declined 4.9% over the month in January to a nine-month low of 4.82 million seasonally adjusted annualized units.
While the rate on a 30-year mortgage fell to a 20-month low of 3.71%, limited inventory has put upward pressure on home prices.
These rising prices, which have outpaced inflation, appear to have tempered sales. While home sales improved 3.2% from January 2014, last year’s sales were hindered by a deep freeze that caused home buying to stall, according to NAR.
Sales of previously owned single-family homes declined 5.1% over the month to 4.27 million units but rose 3.9% from the depressed levels of a year ago. Multifamily home re-sales (condos and co-ops) pulled back for the third straight month, dropping 3.5% to 550,000 units—the lowest level since August 2012. Sales also fell 1.8% compared to a year earlier.
The national pattern held for each of the major regions as well. Over the month, home sales declined, with the West hardest hit. Sales slumped 7.1% to a one-year low of 1.04 million units. I
NAR reports that in the Northeast, sales tumbled 6.0% to 630,000. The national slowdown was more pronounced than in the South (-4.6%) and Midwest (-2.7%), however, where sales fell to 2.07 million and 1.08 million annualized units, respectively. Strong over-the-year gains in the South (+5.6%) and Northeast (+3.3%), helped boost national growth, while sales improved at more modest rates in the West (+1.0%) and Midwest (+0.9%).
In late February the Commerce Dept. reported that new single-family home sales dipped 0.2% in January to a seasonally adjusted annual rate of 481,000 units. However, December’s pace of 482,000 units (annualized) was the highest since June 2008. January’s new home sales posted a solid 5.3% gain compared to the weather-depressed levels of a year ago.
This January’s new home sales were likely hindered by severe weather conditions in the Northeast. Blizzard Juno buried the region under as much as three ft of snow near the end of the month, causing a slowdown in home listings and open houses.
Sales in the region plunged 51.6% over the month to a record low. Sales in the West dipped 0.8% while sales in the Midwest surged 19.2%.
In the South, sales rose 2.2% to their highest level since May 2008. While cold weather froze sales across many regions in January 2014, Blizzard Juno still stifled year-over-year sales in the Northeast during January. New home sales in the region sank 50.0% over the year, the sharpest decline since June 2011.
Meanwhile, sales in the Midwest (+21.6%), South (+8.6%) and the West (+5.0%) all posted solid gains compared to a year earlier.
Existing home sales and new home sales commonly move in different directions. New home sales are based on when a contract is signed and a deposit accepted, while existing home sales are based on closings, which usually follow one to two months after a contract is signed. Moreover, new home sales are based on a smaller sample size and are subject to large revisions and greater volatility.