Home Sales Pace

For the second month in a row, sales of existing U.S. homes fell in January, according to the National Association of Realtors. With the deadline of the first-time home buyer tax credit in December extended through June, buyers felt less pressure to buy immediately. Total sales fell 7.2 percent to a seasonally adjusted annual rate of 5.05 million units, down from December's downwardly revised 5.44 million sales. The silver lining is that January's sales figures were up 11.5 percent over January 2009 data.

"Most of the completed deals in January were based on contracts in November and December," said NAR chief economist Lawrence Yun. "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."

The national median home price fell in January to $164,700 from a downwardly revised $170,500 December price, but the latest median is unchanged from a year ago.

The NAR defines existing homes as all previously-owned single-family homes, townhouses, condominiums, and co-ops. The group "seasonally adjusts" the sales numbers to factor in things like inclement weather, school sessions, winter holidays, etc. to smooth out the trends. The NAR also describes its sales data based on an annual pace. The monthly figure represents the total number of housing units that would be sold in one year if the current rate were to continue unchanged.

Sales Pace by Region

Sales of existing homes dropped across the board on a regional basis during January with the Northeast seeing the greatest decline. Sales there fell 10.9 percent to a seasonally adjusted annual pace of 820,000 units. Still, things are better than last year, as the latest numbers are up 22.4 percent from January 2009.

The South experienced a 7.4 percent monthly decrease in sales, to 1.87 million homes, but sales are up 12.0 percent from the previous year.

In the Midwest, sales declined by 6.9 percent in January to a rate of 1.08 million units. Sales in the region are up 8.0 percent compared with year before.

Sales fell by 5.2 percent in the West to an annual pace of 1.28 million houses, yet still rose by 7.6 percent from one year ago.

Home Prices

The median home price, the point at which half of all homes are sold for more and half are sold for less, fell in all regions but the Northeast on a monthly basis.

In the Northwest, the median price rose to $245,300 from $240,700 in December, and the new price was up 8.8 percent from January 2009.

The Midwest saw a price decline to $130,300 in January from $135,300 the month before. The median price also fell 1.0 percent below the previous year's price.

In the South, the median dropped to $140,200 from $148,400 in December. The price is down 2.0 percent over last year.

The median price in the West sank to $203,400 in January, from $216,200 the month before, and it is down 5.8 percent over the same month in 2009.

Inventory

Housing inventory decreased for the sixth straight month in January, falling 0.5 percent to 3.265 million homes for sale. At the current sales pace, that represents a 7.8-month supply, an increase from December when there was a 7.2-month supply. On a yearly basis, inventory is down 9.6 percent.

Next Report

Data for February existing home sales, prices, and inventory will be available at the end of March.