| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Annual Rate | 4.16M | 4.02M to 4.29M | 4.08M | 4.24M | 4.29M |
| Month over Month | -4.9% | 2.2% | 2.9% | ||
| Year over Year | 4.8% | 9.3% | 5.8% |
Highlights
The NAR data on existing home sales in January show a 4.9 percent slowing the pace of sales to a seasonally adjusted annual rate of 4.08 million units after 4.29 million units in December, although it is up 2.0 percent from a year earlier. The January level is below the consensus up 4.16 million units in the Econoday survey of forecasters. Sales of single-family units is down 5.2 percent to 3.68 million units in January from the prior month and up 2.2 percent from a year ago. Sales of multi-unit properties is down 2.4 percent month-over-month to 400,000 and unchanged from a year ago.
Sales are down in in January from December in three of four regions and flat in one. Sales are down 7.4 percent in the West, 6.2 percent in in the South, and 5.7 percent in the Northeast. Sales are unchanged in the Midwest.
The data include annual revisions.
The months supply of homes available for sale is up to 3.5 in January from 3.2 in December and above 3.0 months in January 2024. The median price of an existing home in January is $396,900 down 1.7 percent from the prior month, but up 4.8 percent year-over-year. Prices are up on a year-over-year basis for a 19th month in a row. Prices are always lower in January before the spring buying season kicks off.
NAR Chief Economist Lawrence Yun said, Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve. When combined with elevated home prices, housing affordability remains a major challenge. He continued, More housing supply allows strongly qualified buyers to enter the market, Yun added. But for many consumers, both increased inventory and lower mortgage rates are necessary for them to purchase a different home or become first-time homeowners.
The Freddie Mac rate for a 30-year fixed rate mortgage was as low as 6.60 percent in the week of December 12, 2024, then rose to 7.04 percent in the January 16, 2025 week from where it has inched down to 6.85 percent as of February 20. The mortgage rate remains within reach of 7 percent, a level that has a chilling effect on consumer decisions to enter the housing market.
Units coming on to the market remained there for an average of 41 days in January, up from 35 in December and 36 in January 2024. The share of first-time buyers declines to 28 percent in January after 31 percent in December and the same as 28 percent a year ago. All-cash sales are 29 percent of sales in January after 28 percent in December and 32 percent in January 2024.
Sales are down in in January from December in three of four regions and flat in one. Sales are down 7.4 percent in the West, 6.2 percent in in the South, and 5.7 percent in the Northeast. Sales are unchanged in the Midwest.
The data include annual revisions.
The months supply of homes available for sale is up to 3.5 in January from 3.2 in December and above 3.0 months in January 2024. The median price of an existing home in January is $396,900 down 1.7 percent from the prior month, but up 4.8 percent year-over-year. Prices are up on a year-over-year basis for a 19th month in a row. Prices are always lower in January before the spring buying season kicks off.
NAR Chief Economist Lawrence Yun said, Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve. When combined with elevated home prices, housing affordability remains a major challenge. He continued, More housing supply allows strongly qualified buyers to enter the market, Yun added. But for many consumers, both increased inventory and lower mortgage rates are necessary for them to purchase a different home or become first-time homeowners.
The Freddie Mac rate for a 30-year fixed rate mortgage was as low as 6.60 percent in the week of December 12, 2024, then rose to 7.04 percent in the January 16, 2025 week from where it has inched down to 6.85 percent as of February 20. The mortgage rate remains within reach of 7 percent, a level that has a chilling effect on consumer decisions to enter the housing market.
Units coming on to the market remained there for an average of 41 days in January, up from 35 in December and 36 in January 2024. The share of first-time buyers declines to 28 percent in January after 31 percent in December and the same as 28 percent a year ago. All-cash sales are 29 percent of sales in January after 28 percent in December and 32 percent in January 2024.
Market Consensus Before Announcement
Sales are seen down a bit at an annual rate of 4.16 million units in January after rising more than expected to 4.24 million in December from 4.150 million in November.
Definition
Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.
Description
This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
