Existing-home sales in the U.S. crept forward in January to the highest annual rate in six months, and subpar housing supply levels propelled price growth to the fastest increase since last April, according to the latest report from the National Association of Realtors (NAR).
The West was the only region to see a decline in sales during the month of January, according to NAR's report.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, inched up by 0.4 percent to a seasonally adjusted annual rate of 5.47 million in January from a downwardly revised 5.45 million in December. Sales are now 11.0 percent higher than a year ago – the largest year-over-year gain since July 2013 (16.3 percent).
Lawrence Yun, NAR chief economist, says existing sales kicked off 2016 on solid footing, rising slightly to the strongest pace since July 2015 (5.48 million). "The housing market has shown promising resilience in recent months, but home prices are still rising too fast because of ongoing supply constraints," he said. "Despite the global economic slowdown, the housing sector continues to recover and will likely help the U.S. economy avoid a recession."
The median existing-home price for all housing types in January was $213,800, which NAR says is up 8.2 percent from January 2015 ($197,600). Last month's price increase was the largest since April 2015 (8.5 percent) and marks the 47th consecutive month of year-over-year gains.
NAR reports that total housing inventory at the end of January increased by 3.4 percent to 1.82 million existing homes available for sale, but is still 2.2 percent lower than a year ago (1.86 million). Unsold inventory is at a 4.0-month supply at the current sales pace, up slightly from 3.9 months in December 2015.
"The spring buying season is right around the corner and current supply levels aren't even close to what's needed to accommodate the subsequent growth in housing demand," Yun added. "Home prices ascending near or above double-digit appreciation aren't healthy – especially considering the fact that household income and wages are barely rising."
The share of first-time home buyers remained at 32 percent in January for the second consecutive month and is up from 28 percent a year ago. NAR says that first-time buyers in all of 2015 represented an average of 30 percent, up from 29 percent in both 2014 and 2013.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage stayed below 4 percent for the sixth consecutive month and declined in January to 3.87 (the lowest level since October 2015) from 3.96 percent in December. The average commitment rate for all of 2015 was 3.85 percent.