Buyers kicked off the year rushing to close on homes as the market only grew more competitive.
Existing-home sales rose 6.7 percent in January, according to the National Association of Realtors. The deluge of deals came alongside a record low for inventory and rising mortgage rates.
“Buyers were likely anticipating further rate increases and locking-in at the low rates,” NAR chief economist Lawrence Yun said in a statement. “Consequently, housing prices continue to move solidly higher.”
The interest rate for 30-year, fixed-rate mortgages was 3.45 percent in January, up from 3.10 percent in December, according to Freddie Mac. Buyers appeared to jump to close deals amid the rising rate as a nationwide shortage of available homes kept prices high and the market exceptionally tight.
The median price for existing homes rose 15.4 percent from January 2021 to $350,000. Prices have risen consistently each month from the year before for nearly ten years — a record from at least 1968, when data collection began.
The supply of homes below $500,000 are “disappearing,” Yun said.
Some 860,000 residential units remained for sale at the end of January, or about 1.6 months of inventory. Home sales grew everywhere in the U.S., with the largest increase in the south, followed by the northeast, then the midwest and west, where the average price for a previously owned home was $505,800.
“We will continue to beat the drum for more inventory,” said NAR President Leslie Rouda Smith, a broker associate at Dave Perry-Miller Real Estate in Dallas, “which will give buyers additional options and will also help alleviate increasing costs.”
Adding to the inventory squeeze are supply-chain backlogs causing massive delays in new home construction across the country. The Wall Street Journal reported last month that despite an uptick in new construction, new homes were missing critical materials like windows, garage doors, appliances and paint.