Eye On Housing
Existing home sales decreased 5.1% in January, and decreased 5.1% from the same period a year ago. The National Association of Realtors (NAR) reported January 2014 total existing home sales at a seasonally adjusted rate of 4.62 million units combined for single-family homes, townhomes, condominiums and co-ops, down from a 4.87 million units in December.
The slide occurred in every region. Year over year, only the South reported a slight 1.6% increase from January 2013. Seasonally adjusted condominium and co-op sales remained flat in January, and were up 1.8% for the year.
First-time buyers comprised 26% of January 2014 sales, down from 27% in December and 30% for the same period a year ago. The January first-time buyer share was the lowest since NAR began reporting that share monthly in October 2008. The historical average first-time buyer share is about 40%.
Total housing inventory increased 2.2% in January to 1.90 million existing homes. At the current sales rate, the January 2014 inventory represents a 4.9-month supply compared to a 4.6-month supply in December, and a 4.4-month supply of homes a year ago. NAR also reported that the January median time on market for all homes was 67 days, down from 72 days in December and 71 days during the same month a year ago. NAR reported that 31% of homes sold in January were on the market less than a month, compared to 28% of all homes sold in December.
The share of distressed sales increased for the first time in five months to 15% of sales in January, up from 14% in December and 24% a year ago. Distressed sales are defined as foreclosures and short sales sold at deep discounts. All cash sales were 33% of January transactions, up from 32% in December and 28% the same period a year ago. Individual investors purchased a 20% share in January, down from 21% in December and 19% a year ago. About 70% of January investors paid cash.
The median sales price for existing homes of all types fell to $188,900 in January from $197,700 in December, but was up 10.7% from a year ago. The median condominium/co-op price was $188,700 in January, down from $197,600 in December, but up 13.0% from January 2013.
The December Pending Home Sales Index fell sharply by 8.7% in December. With much of the decrease attributed to weather, it was expected that January existing home sales would also fall sharply. However, NAR reported that higher flood insurance rates presented a new headwind for just under a tenth of the market, and that 40,000 home sales were either cancelled or delayed because of higher flood insurance rates. NAHB is actively addressing this problem by supporting H.R. 3370, the Homeowner Flood Insurance Affordability Act, which would provide certainty and financial stability to the National Flood Insurance Program.
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