Existing-home sales fell 7.2% from December 2009 to a seasonally adjusted annual rate of 5.05 million units in January, according to the National Association of Realtors (NAR).
While down from December's 5.44 million units, January's total remains 11.5% above the 4.53 million existing homes sold in January 2009.
Lawrence Yun, NAR chief economist, says there is still some delay between shopping and closing that affected current sales.
‘Most of the completed deals in January were based on contracts in November and December,’ Yun explains. "People who got into the market after the home buyer tax credit was extended in November have only recently started to offer contracts, so it will take a couple months to close those sales. Still, the latest monthly sales decline is not encouraging and raises concern about the strength of a recovery."
Total housing inventory at the end of January fell 0.5% to 3.27 million existing homes available for sale, which represents a 7.8-month supply at the current sales pace – up from a 7.2-month supply in December. Raw unsold inventory is 9.6% below a year ago, and is at the lowest level since March 2006.
"Activity should be picking up strongly in late spring as buyers take advantage of the tax credit, which is critical to absorb distressed properties reaching the market and to continually chip away at inventory," Yun adds. "With a downtrend in the number of homes on the market, especially in the lower price ranges, values are beginning to firm but with great variance around the country."
The national median existing-home price for all housing types was $164,700 in January, unchanged from a year earlier. Distressed homes, which accounted for 38% of sales last month, continue to downwardly distort the median price.
A parallel NAR practitioner survey shows first-time buyers purchased 40% of homes in January – down from 43% in December. Investors accounted for 17% of transactions in January – up from 15% in December; the remaining sales were to repeat buyers. The survey also shows that buyer traffic increased 9.4% in January.
SOURCE: National Association of Realtors