Real estate was the big newsmaker last week, with existing and new home sales showing middling performance. While real estate was mixed, initial jobless claims took an unexpected bounce upward.
Existing Home Sales
Sales of existing homes for January were a mixed bag. Transactions of existing single-family homes, townhomes, condominiums and co-ops, fell 4.9 percent to an annual rate of 4.82 million in January, according to the National Association of Realtors. This was their lowest pace in nine months, but 3.2 percent higher than the same period a year ago.
“January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” said Lawrence Yun, NAR chief economist. “Realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
Existing home inventory did tick up for January, growing 0.5 percent by the end of the month to 1.87 million existing homes available for sale, but was 0.5 percent lower than January 2014’s 1.88 million unit-supply. To Yun’s point, unsold inventory is at a 4.7-month supply at the current sales pace – up from 4.4 months in December.
January’s median price for existing homes of all types grew to $199,600, a 6.2 percent increase over January 2014, marking the 35th consecutive month of year-over-year price gains.
“The labor market and economy are markedly improved compared to a year ago, which supports stronger buyer demand,” Yun noted. “The big test for housing will be the impact on affordability once rates rise.”
New Home Sales
New home sales for January saw similar performance. Transactions of new single-family homes fell 0.2 percent from the previous month to a rate of 481,000, according to estimates released last week by the Census Bureau and the Department of Housing and Urban Development. While down on a monthly basis, January’s sales were 5.3 percent higher than January 2014’s estimated rate of 457,000.
Looking at price, the median sales price of new houses sold in January came in at $294,300, and the average sales price was $348,300. Looking at supply, the estimate of new homes for sale at the end of January totaled 218,000, representing a supply of 5.4 months at January’s sales pace.
Once again, real estate analysts were saying that a true housing recovery depends on other economic factors.
“We are still taking sort of a meandering, bumpy path toward recovery,” IHS Global Insight U.S. Economist Stephanie Karol told the New York Times. “We expect housing will improve later this year due to the improvement in the labor market and credit conditions.”