Steel Markets

Existing Home Sales Drop to 2015 Level

February 21, 2019

Existing home sales fell for the third month in January for the lowest seasonally adjusted annual rate since November 2015, according to the National Association of Realtors. Sales dipped 1.2 percent from December to a SAAR of 4.94 million homes last month. Compared to a year ago, sales were down 8.5 percent.

“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,” said NAR Chief Economist Lawrence Yun. “Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months.”

Inventory was at 1.59 million units, up from 1.53 million in December, representing a 3.9-month supply at the current sales rate. Inventory is still considered too low for a healthy market.

“In particular, the lower end of the market is experiencing a greater shortage, and more home construction is needed,” says Yun. “Taking steps to lower construction costs would be a tremendous help. Local zoning ordinances should also be reformed, while the housing permitting process must be expedited; these simple acts would immediately increase homeownership opportunities and boost local economies.”

The national median sale price was $247,500 in January, up 2.8 percent from a year earlier and down slightly from $254,700 in December. The gain in January was the slowest year-over-year increase since February 2012.

Sales fell 2.5 percent in the Midwest, 1.0 percent in the South and 2.9 percent in the West. The Northeast was the sole region to register a gain, inching up 2.9 percent for an annual rate of 700,000.