The National Association of Realtors (NAR) reported that existing home sales increased 3.3 percent in January, rising to its highest annual level since February 2007. There were 5.69 million existing homes sold in January, up from 5.51 million in December. NAR Chief Economist Lawrence Yun attributed the strong growth in 2016 to “strong hiring and improved consumer confidence at the end of last year,” but noted ongoing challenges from “inventory levels that are far from adequate and deteriorating affordability conditions.” On a year-over-year basis, sales of existing homes have increased 3.8 percent, led by strength in every region of the country except for the Midwest.
In January, both single-family (up from 4.91 million to 5.04 million) and condo/co-op (up from 600,000 to 650,000) sales were higher. Inventories remain low, as noted above, with 3.6 months of supply on the market, the same as in the previous report. That is down from an average of 4.4 months of supply for 2016 as a whole. Reduced supply has led to higher prices, not surprisingly. The median price for an existing home sold in January was $228,900, up 7.1 percent over the past 12 months.