The housing market has been heating up over the summer, with both pending and existing home sales posting their strongest showings of the year in July.
Tight Inventory Boosting Home Prices
Existing home sales showed a slight improvement in January, while a shrinking inventory and growing buyer traffic raised the possibility of higher prices this spring.
January existing home sales were at a seasonally adjusted annual rate of 4.92 million, the National Association of Realtors (NAR) reported today, a 0.4 percent increase from Decemberâs downwardly adjusted rate of 4.90 million. On an annual basis, sales were up 9.1 percent from their January 2012 level of 4.51 million.
The median sales price of a previously owned home purchased in January was $173,600, reflecting a 12.3 percent annual increase from the $154,600 figure of January 2012. Meanwhile, the inventory of homes available for sale continued to shrink, to 1.74 million units, reflecting a 4.2 month supply and a decline of one-quarter from the level of one year ago.
Tight inventory could boost prices
âBuyer traffic is continuing to pick up, while seller traffic is holding steady,â said Lawrence Yun, NAR chief economist. âIn fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country.â
Yun said some seasonal increase in inventory is expected this spring, but it may not be enough to avoid faster-than-normal price increases as multiple buyers compete for the same properties.
First-time homebuyers made up 30 percent of all purchases in January, down slightly from 30 percent one year ago. Investors made up 19 percent of purchases, down from 23 percent in January 2012.
Condos outpace single-family homes
Condominium and co-op sales have been rising slightly faster than sales of single-family homes. Sales of existing condos and co-ops were up 1.8 percent in January, to an adjusted annual pace of 580,000 and a 13.7 percent increase over the annual rate of 510,000 units in January 2012.
Meanwhile, existing single-family home sales were up only 0.2 percent in January, to an annual rate of 4.34 million, and an 8.5 percent gain over the January 2012 seasonally adjusted rate of 4.00 million units.
First published on MortgageLoan.com at: http://www.mortgageloan.com/tight-inventory-boosting-home-prices-9371
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