Existing home sales fell 0.4 percent to a seasonally adjusted annual rate of 4.89 million units last month, down from 4.91 million in December and 23.4 percent lower than the 6.44 million-unit pace a year ago, the National Association of Realtors said today in a release on its website.
The national median existing-home price for all housing types was $201,100 in January, down 4.6 percent from the same period last year, with higher-priced markets dragging the median lower.
“Keep in mind the biggest slowdown in home sales last year was in high-cost markets, which were hard-hit by the credit crunch and notably higher interest rates for jumbo loans, but relief is on the way,” said NAR President Richard Gaylord
“Once buyers have greater access to higher loan limits, it will take a few months for increased shopping activity to translate into higher sales,” Gaylord said. “We should see some movement of pent-up demand by this summer, but higher loan limits need to be implemented fully and promptly to have maximum benefit.”
Total existing housing inventory climbed 5.5 percent at the end of January to 4.19 million homes available for sale, a 10.3-month supply at the current sales pace, up from a 9.7-month supply in December.
By region, existing home sales rose 3.4 percent in the Midwest, dipped 0.5 percent in the South, fell 2.1 percent in the West, and dropped 3.6 percent in the Northeast.
NAR chief economist Lawrence Yun noted that the soft sales environment could be attributed to a lack of available loan programs, but expressed that the impending higher loan limits should spark sales in the second half of 2008.
“Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales,” he said.
“As the increased limits for FHA and conventional loans are implemented, more buyers will have access to safer FHA loans and lower interest rate loans in high-cost areas, which could lead to steadily higher home sales later in the year.”
(photo: organicmatter)
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