Icy Inventories, Diminishing Demand Froze January Sales

Two unfortunate trends combined to spoil January’s existing home sales and raise concerns about the coming spring season.  After a better than expected December, Sales declined in January to their lowest rate in nine months.

Total existing-home sales1, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 6.1 percent to a seasonally adjusted annual rate of 4.93 million in November from a downwardly-revised 5.25 million in October. Sales dropped to their lowest annual pace since May (4.91 million) but are above year-over-year levels (up 2.1 percent from last November) for the second straight month.

Total housing inventory at the end of January increased very slightly, 0.5 percent, to 1.87 million existing homes available for sale.  Inventory is 0.5 percent lower than a year ago (1.88 million). Unsold inventory is at a 4.7-month supply at the current sales pace – up from 4.4 months in December.

The median existing-home price for all housing types in January was $199,600, which is 6.2 percent above January 2014. This marks the 35th consecutive month of year-over-year price gains.

The median existing-home price2 for all housing types in November was $205,300, which is 5.0 percent above November 2013. This marks the 33rd consecutive month of year-over-year price gains.

Total housing inventory3 at the end of November fell 6.7 percent to 2.09 million existing homes available for sale, which represents a 5.1-month supply at the current sales pace – unchanged from last month. Despite the tightening in supply, unsold inventory remains 2.0 percent higher than a year ago, when there were 2.05 million existing homes available for sale.

Single-family home sales dropped 6.3 percent to a seasonally adjusted annual rate of 4.33 million in November from 4.62 million in October, but remain 2.4 percent above the 4.23 million pace a year ago. The median existing single-family home price was $206,200 in November, up 5.6 percent from November 2013.

Existing condominium and co-op sales declined 4.8 percent to a seasonally adjusted annual rate of 600,000 units in November from 630,000 in October, and are unchanged from a year ago. The median existing condo price was $199,000 in November, which is 1.2 percent higher than a year ago.