Home sales rose 3% in January but prices are up too
- Sales declined 1.7% from the prior year
- The median existing-home sales price rose 5.1% from Jan. 2023
- Apartment rent prices are down slightly from a year ago
FILE – A “sold” is posted outside a single family home in a residential neighborhood, in Glenside, Pa., Wednesday, Aug. 4, 2021. Average long-term U.S. mortgage rates jumped again this week, Thursday, Sept. 8, 2022, to their highest level in almost 14 years, certain to keep even more potential buyers out of a housing market that’s cooled considerably since the Federal Reserve began jacking up its benchmark borrowing rate. .(AP Photo/Matt Rourke, File)
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(NewsNation) — Sales of previously owned U.S. homes rose in January, reaching the highest level since August as prices continued to rise.
Home sales rose 3.1% last month from December to a seasonally adjusted annual rate of 4 million, the National Association of Realtors (NAR) said Thursday.
The new data suggests some buyers were encouraged to return to the market after mortgage rates fell by about a percentage point from near-8% highs in the fall.
Compared with January 2023, last month’s sales were down 1.7%. In 2023, sales of previously-occupied homes fell to their lowest level in 30 years.
“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” NAR Chief Economist Lawrence Yun said in a release.
The uptick in sales, and ongoing inventory challenges, pushed prices to an all-time high for January. Last month, the median existing-home price for all housing types was $379,100, up more than 5% from the year before.
“Multiple offers are common on mid-priced homes, and many homes were still sold within a month,” Yun said. “The elevated share of cash deals – 32% – indicated a market full of multiple offers and propelled by record-high housing wealth.”
Home prices in the northeast have risen especially fast, with the median price now $434,000, up more than 10% from the year prior.
Mortgage rates are lower than they were in October but have started to rise in recent weeks. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.9% as of February 22 — the highest level since mid-December.
What about rent prices?
Rental prices dropped 0.3% year-over-year, to a median of $1,712 a month in January, according to Realtor.com. That made rent exactly $1 cheaper than in December for apartments ranging from studios to 2-bedrooms.
Compared to the rental peak in August 2022, the current U.S. median rent is down $46 but still nearly $265 more than the same time in 2020, before the pandemic.
Changes in rent prices varied significantly from market to market. Last month, the median rent in the west was -0.3% lower than a year ago with Phoenix (-4.0%), Riverside, CA (-2.6%) and Las Vegas (-1.8%) seeing larger declines, per Realtor.com.
Rents increased year-over-year in midwest cities like Chicago (4.2%), Indianapolis (3.5%) and Kansas City, Missouri (3.1%).
“The robust labor market in the Midwest, characterized by a 2.9% unemployment rate in December 2023, is likely contributing to increased rental demand,” the Realtor.com report noted.