Sales of U.S. homes rose again in January, signaling the strong momentum from 2020 may be carrying over into this year.
According to a report released by the National Association of Realtors, data shows that housing market activity rose a modest 0.6% from the previous month. January’s existing home sales reached 6.69 million, a seasonally adjusted rate of annualized units. Last month’s sales of existing homes rose 23.7% from a year earlier.
The prices of homes also rose. The median home price was $303,900 in January. That is an increase of 14.1% from a year ago. Prices continue to climb marking a continuous year-over-year gain for 107 straight months.
The extremely hot housing market has left the number of available homes for sale at record lows. Scarcity of properties has been the main driver of home prices.
“Sales easily could have been 20% higher if there had been more inventory and more choices,” said Lawrence Yun, NAR’s chief economist.
At the end of January, there were an all-time low 1.04 million homes for sale nationally down 1.9% from December and 26% from a year ago, NAR said. There is a 1.9 months’ supply at the current sales pace, down from a 3.1 months’ supply in January 2020. 71% of homes sold last month had been on the market for less than a month. 21 days is the approximate time it takes for a home to go from listing to contract in the current market. Last year, it took 43 days.
“The days on the market continue to be very swift,” Yun said. “No winter slowdown.”
The U.S. housing market has reinforced a strong comeback since last summer after seeing a sharp decline in the spring due to the coronavirus outbreak. Sales surged last year to the highest level since the height of the housing boom in 2006.
There are several market trends to help drive the strong demand for homeownership. Mortgage rates are at historic lows. Many Americans are seeking more space due to remote work and virtual schooling. And more millennials are entering the market as first-time home buyers.
Regionally, all four regions showed double digit growth in price compared to January 2020. The West had the largest gain of 16.1%. The northeast saw an increase of 15.8% followed by 14.7% in the Midwest. The smallest price gains were in the south with 14.6% from a year ago.
In the Charlotte area, the residential real estate market continues to boom. Like national trends, homes are selling quickly while inventory is low, and prices are increasing.
Over the past year, new listings are down 2.9%. Inventory shrank 28.4% while pending sales rose 8.5%. The region has about a one-month supply of homes for sale. That is a 32% decrease over the past year. Median sale prices have increased 8% to $290,000 due to the low inventory and high demand.
Both locally and nationally, the demand for homes combined with ultra-low inventory, sets the stage for a wildly competitive homebuying season this spring.