The numbers: Existing home sales in the US rose 0.6% to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors said Friday. Compared to a year ago, home sales increased by 23.7%.
Economists polled by The Wall Street Journal had predicted that existing home sales would drop to a median of 6.66 million.
What happened: The median price of an existing home rose to $ 303,900 in January, up 14.1% from a year ago.
The stock of homes for sale fell to a record high of 1.04 million units at the end of January. That is a decrease of 25.7% on an annual basis. The market had a supply of 1.9 months of owner-occupied homes. 6 months supply is considered a sign of a balanced market.
The South and Midwest showed an increase in sales in January.
Big picture: Sales have moved sideways since the cycle is high in October. Economists believe that low mortgage rates will continue to boost demand for housing in the coming months. Buyers are also looking for more space and more remote locations in the aftermath of the pandemic.
What the NAR said: “Home sales continued to rise in the first month of the year as buyers quickly landed virtually every new offering that hit the market. Sales could easily have been as much as 20% if there had been more inventory and more choices, ”said Lawrence Yun, NAR chief economist.
What do economists say? “In general, record low mortgage rates and families fleeing from busier housing situations are driving demand for single-family homes, despite ongoing labor market turmoil and higher house prices. Indeed, this is a sector that is emerging from the crisis stronger than it entered into, ”said Josh Shapiro, chief US economist at MFR Inc.
Market reaction: US stocks opened higher on Friday with the S&P 500 index SPX,
Up 12.48 points during afternoon trading after a drop in the past three trading sessions.