Existing house sales in the United States has hit a more than 12-year low in January, but the rate of decrease moderated, fostering cautious optimism that the housing market downturn may be nearing its end.
The National Association of Realtors said on Tuesday that existing house sales dropped 0.7 percent last month to a seasonally adjusted annual rate of four million units, the lowest level since October 2010.
The sales dropped for the 12th consecutive month, the longest period since 1999.
While sales were up in the South and West, they were down in the Northeast and Midwest. Reuters polled economists who predicted an increase in home sales to a rate of 4.10 million units.
Resale home sales, which make up a sizable portion of American home sales, fell 36.9% year over year in January.
Lawrence Yun, chief economist for NAR, stated that “Home sales are bottoming out.”
The US Federal Reserve’s aggressive interest rate hike campaign has had the greatest negative impact on the housing market. Seven consecutive quarters of declining residential investment are the longest such streak since 2009.
Nonetheless, the worst has likely passed. In February, mood among homebuilders reached a five-month high, although it was still negative.
Nonetheless, it will take some time before the housing market recovers. According to government figures released last week, the number of single-family homes built and prospective home construction permits declined in January.
According to data from mortgage financing company Freddie Mac, mortgage rates are once again rising, with the 30-year fixed mortgage rate climbing to an average 6.32 percent last week from 6.12 percent the week before.
A surge in bond yields following recent good retail sales and inflation statistics sparked concerns that the Fed would continue raising interest rates after the middle of the year, which led to the second consecutive weekly hike.
In January, the median price of an existing home rose by 1.3 percent from a year earlier to $359,000. 980,000 previously owned homes were available, up 15.3 percent from a year earlier and 2.1 percent from December.
The present inventory of existing homes would run out in 2.9 months, up from 1.6 months a year ago, if sales continue at the pace they were in January. A four to seven month supply is considered to be a healthy supply and demand balance.
Last month, homes stayed on the market for an average of 33 days, up from 26 days in December. 54 percent of the homes that were sold in January had only been listed for a few weeks.
An increase from 27 to 31 percent of sales were made by first-time purchasers. Sales made with only cash accounted for 29% of all transactions, up from 27% in the previous year.
