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OFFICIAL MAGAZINE OF THE NATIONAL ASSOCIATION OF REALTORS®

Daily Real Estate News  |   February 25, 2008  |   Existing-Homes Sales Slip in January
Existing-home sales eased slightly in January with some potential buyers trying to time the market and others waiting for higher loan limits on conventional financing, according to the NATIONAL ASSOCIATION OF REALTORS®.

Existing-home sales — including single-family, town homes, condominiums, and co-ops — slipped 0.4 percent to a seasonally adjusted annual rate of 4.89 million units in January from an upwardly revised level of 4.91 million in December. Existing-home sales are 23.4 percent below the 6.44 million-unit pace in January 2007.

“Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales,” says Lawrence Yun, NAR chief economist. “As the increased limits for FHA and conventional loans are implemented, more buyers will have access to safer FHA loans and lower interest rate loans in high-cost areas, which could lead to steadily higher home sales later in the year.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 5.76 percent in January from 6.10 percent in December. The rate was 6.22 percent in January 2007. Last week, Freddie Mac reported the 30-year fixed rate rose to 6.04 percent.

Some Markets Fare Well

The national median existing-home price for all housing types was $201,100 in January, down 4.6 percent from a year ago when the median was $210,900. Because the slowdown in sales is greater in high-cost markets, there is a downward pull to the national median from a year ago when there were relatively more sales in higher priced areas.

Price changes within metropolitan areas are more meaningful for consumers. The latest data shows roughly half of the metro areas in the United States had price gains, with healthy increases in markets such Buffalo, Peoria, and Amarillo.

“Some markets like Barnstable, Mass., which had been weakening in the past year, may have turned the corner,” Yun says.

By the Numbers

NAR President Richard Gaylord says some buyers in high-cost areas are waiting for higher limits on conventional loans.

“Keep in mind the biggest slowdown in home sales last year was in high-cost markets, which were hard-hit by the credit crunch and notably higher interest rates for jumbo loans, but relief is on the way,” Gaylord says. “Once buyers have greater access to higher loan limits, it will take a few months for increased shopping activity to translate into higher sales. We should see some movement of pent-up demand by this summer, but higher loan limits need to be implemented fully and promptly to have maximum benefit.”

Here's a closer look at national numbers:
  • Total housing inventory: rose 5.5 percent at the end of January to 4.19 million existing homes available for sale, which represents a 10.3-month supply at the current sales pace, up from a 9.7-month supply in December.
  • Single-family home sales: slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in January from 4.32 million in December, and are 22.4 percent below 5.59 million-unit pace in January 2007. The median existing single-family home price was $198,700 in January, down 5.1 percent from a year ago.
  • Existing condominium and co-op sales: fell 6.5 percent to a seasonally adjusted annual rate of 550,000 units in January from 588,000 in December, and are 30.2 percent below the 788,000-unit level a year ago. The median existing condo price was $220,400 in January, which is 1 percent lower than January 2007.

Regional Sales

Here's a look at existing-home sales across the United States:
  • Midwest: rose 3.4 percent to an annual pace of 1.20 million in January, but are 20 percent below January 2007. Median price: $154,200, down 4 percent from a year ago.
  • South: slipped 0.5 percent in January 2007 to a level of 1.95 million and are 22 percent below a year ago. Median price: $164,300, which is 5.9 percent lower than January 2007.
  • West: declined 2.1 percent to an annual rate of 930,000 in January and are 28.5 percent below January 2007. Median price: $300,100, down 6.7 percent from a year ago.
  • Northeast: fell 3.6 percent to an annual rate of 810,000 in January, and are 25.7 percent below a year ago. Median price: $270,800, up 3.1 percent from January 2007.

— REALTOR® magazine online

For more economic news and research reports, visit NAR's Research division at REALTOR.org.

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