Existing home sales in January 2020 were either lackluster or robust depending on which statistic or metric is viewed, based on the National Association of Realtors® (NAR) latest press release. NAR sales focus is on a seasonally adjusted annualized rate (SAAR). The following describes four individual conclusions regarding existing home sales in January 2020 using NAR data. NAR lead the press release with the Sales Down 1.3 Percent headline.
Down 1.3 percent in January 2020 – NAR’s Headline on the Press Release comparing the January 2020 SAAR to the December 2019 SAAR
Up 9.6 Percent in January 2020 – stated in the second paragraph of NAR’s Press Release comparing January 2020 to January 2019
Up 11.6 Percent in January 2020 – listed in a table at nar.realtor comparing actual closings for the month vs January 2019
Up 11.7 Percent in January 2020 – total number of closings (not seasonally adjusted) in the 12-months ending January
Actual closings in January 2020 totaled 318,000 compared to 285,000 in January 2019, hence sales were up 11.6 percent. Since that is the number of homes that transferred ownership, this is the appropriate statistic to describe housing market performance in January 2020 – in my opinion.
The following table shows the total number of sales for the prior 12-months, with sales up 11.7 percent. Median existing home prices (shown monthly in the blue bars) increased 6.8 percent to $266,300 in January 2020 compared to a year ago.
Other details of January 2020 home sales included:
- Median home prices have increased 95 consecutive months on a year-over-year basis
- 42 percent of homes sold in January 2020 were on the market less than one month, with the typical property on market the for 43 days compared to 49 days a year ago
- One-in-three sales in January (32 percent) were purchased by first-time homebuyers
- There were 1.42 million homes available for sale at the end of January 2020, down 10.7 percent versus a year ago
- The U.S had an estimated 3.1 month inventory of homes available for sale, down from 3.8 months in January 2019. Normal inventory is considered to be 6.0 months
- Investors acquired 17 percent of home sales in January
- All-cash transactions made up one-in-every-five sales (21 percent)
To read the entire NAR release click https://www.nar.realtor/newsroom/existing-home-sales-drop-1-3-in-january
Despite an extreme limited inventory of homes available for sale, low interest rates and a growing economy are fueling the demand for housing, and ultimately driving housing sales.