Rising mortgage rates pressure buyers to move quickly
Home prices climbed in January as inventory fell to a new record low.
The median price for a home last month was $350,300, up 15.4% from a year ago, according to the National Association of Realtors.
“Buyers were likely anticipating further rate increases and locking in at the low rates, and investors added to overall demand with all-cash offers,” said Lawrence Yun, NAR’s chief economist. “Consequently, housing prices continue to move solidly higher.”
Sales of existing homes — which include single-family homes, townhomes, condominiums and co-ops — surged 6.7% from December, but were down 2.3% from a year ago, largely because there were so few homes to buy.
At the end of January, the inventory of homes available to buy fell to an all-time low of 860,000. That’s the lowest since NAR began tracking it in 1999. At the current monthly sales pace, supply would last just 1.6 months, which is also a record low.
“The inventory of homes on the market remains woefully depleted,” Yun said.
But the availability and affordability of homes depends greatly on price level.
Homes priced at $500,000 and below are disappearing, Yun said, while supply has risen at the higher price range. Such increases will continue to shift the mix of buyers toward high-income consumers and push out first-time homebuyers, he said.
“There are more listings at the upper end — homes priced above $500,000 — compared to a year ago, which should lead to less hurried decisions by some buyers,” Yun added. “Clearly, more supply is needed at the lower-end of the market in order to achieve more equitable distribution of housing wealth.”
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