Existing-home sales come roaring back in January, 2022: Massachusetts Homebuyers Homeownership

 After swinging to a decline in December, existing home sales surged into positive territory in January, while the inventory of unsold homes fell to a historic low, the National Association of REALTORS® said. Total existing home sales, which are completed transactions, including single-family homes, townhomes, condominiums and co-ops, jumped 6.7 percent from December to a seasonally adjusted annual rate of 6.5 million in January. Year over year, sales were down 2.3 percent from 6.65 million transactions in January 2021.   

 The median existing home price for all housing types in January was $350,300, up 15.4 percnet from January 2021, as median prices rose in each region.  Total housing inventory at the end of last month stood at 860,000 units, down 2.3 percent from December and down 16.5 percent from a year earlier. January’s unsold inventory represented a 1.6 month supply at the current sales pace, down from 1.7 months in December and 1.9 months a year ago. “Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers,” NAR chief economist Lawrence Yun said in a press release.

 “Consequently, housing prices continue to move solidly higher.” Yun expects existing-home sales to slow for certain buyers in coming months as mortgage rates continue to rise. Many moderate-income buyers who barely qualified for loans at lower interest rates will be priced out, as will buyers in expensive markets, where the increased rates will mean an additional $500 to $1,000 in monthly payments. Properties typically remained on the market for nineteen days in January, flat compared to December and down from twenty one days in January 2021.

 Seventy nine percent of homes sold in January were on the market for less than a month. By property type, single family home sales rose to a seasonally adjusted annual rate of 5.76 million, up 6.5 percent from 5.41 million in December and down 2.4 percent from a year earlier. The median existing single family home price was $357,100, up 15.9 percent on a year over year basis.  Existing condominium and co-op sales came in at a seasonally adjusted annual rate of 740,000 units, up 8.8 percent from 680,000 in the previous month and down 1.3 percent compared to December 2021.  The median existing condo price rose 10.8 percent year over year to $97,800.

 “The market is still thriving as an abundance of home sales took place in January,” NAR President Leslie Rouda Smith said. “We will continue to beat the drum for more inventory, which will give buyers additional options and will also help alleviate increasing costs.”  In January, first time buyers were responsible for twenty seven percent of sales, down from thirty percent in December and down from thirty three percent in January 2021, while individual investors or second home buyers, who make up many cash sales, purchased twenty two percent of homes, up from seventeen percent in December and fifteen percent in January 2021. By major U.S. region, sales of existing homes jumped 9.3 percent on a month over month basis in the South, while they rose 6.8 percent in the Northeast and 4.1 percent in both the Midwest and West. 

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