US existing home sales slip in January

Washington– Sales of existing homes fell slightly in January as compared to the month before, but there is still strong demand amid low borrowing rates, according to an industry report Friday.

Prices also dipped last month but remain sharply higher than a year ago, as would-be homebuyers compete for available properties and builders struggle to keep up while focusing largely on high-end construction, according to the National Association of Realtors.

The housing market remains a critical bright spot for the US economy, and NAR Chief Economist Lawrence Yun said in a statement that “sales are off to a strong start” this year.

Total sales of single-family homes, townhomes, condos and co-ops were down 1.3 percent compared to the prior month to an annual rate of 5.46 million, dragged down by a sharp drop in the western United States.

However, sales surged 9.6 percent compared to January 2019, while prices are 6.8 percent higher – the 95th consecutive month of year-over-year increases, according to the data.

The hot sales pace has caused the inventory of housing available for sale to steadily dwindle and in January it fell to its lowest level since 1999, dropping nearly 11 percent from a year earlier to 1.4 million units, NAR said. That is equivalent to 3.5 months’ supply at the current sales pace.

But Yun said there are signs construction is ramping up, which should boost sales.

First time homebuyers comprised about a third of sales last month, continuing a slow uptick in recent months.

“It is good to see first-time buyers slowly stepping into the market,” Yun said.