“For sale” and “Sales on a waiting” sign in West Seattle Fourth in Seattle, Washington, USA, on Tuesday, June 18, 2024. The National Real Estate Association should publish existing information on the sale of homes on June 21.
David Ryder | Bloomberg | Getty Images
High mortgage rates and elevated home prices combined to overthrow the sale of homes in January.
Sales based on signed contracts for existing homes fell 4.6% from December to the lowest level since the National Real Estate Association began to follow this metrik in 2001. The sale was reduced by 5.2% from January 2024. This sale is an indicator of future closure.
“It is unclear if the coldest January has contributed to the market in 25 years, and if so, expect more sales activity in the coming months,” said Lawrence Yun, the chief economist Nar. “However, it is obvious that elevated houses’ prices and higher mortgage rates strained accessibility.”
Although the weather may have been a factor, the sale increased monthly in the northeast and fell in the west, which would see the smallest influence of cold temperatures. The sale has fallen the hardest in the south, which has been the most active region for the sale of home in recent years.
The mortgage rates were also higher in January. The average rate on the popular 30-year fixed loan spent the first half of December below 7%, but then it began to grow. It was solid above 7% for the whole January, according to Mortgage News Daily.
House prices have been mitigated in the last few months in certain areas, and more sellers have reduced prices, but at the national level they are still higher than a year ago.
This sales drop also followed the fact that the list of homes for sale in January, including homes that were under contract but have not yet been sold, increased by 17% compared to last year, growing on an annual basis for 14 months in a row, Realtor.com states.
“More for inventory sales can generate more contract signatures, but climbing home supply is not evenly distributed around the US,” noted Danielle Hale, the main economist for Realtor.com. “Furthermore, many areas with great demand see a relatively low stock for sale, which limits progress to the higher sales of the house.”
