Photo: David Sawyer/Flickr
Existing home sales in the US were off to a blazing start in 2017, with every major region of the country recording increases except for the Midwest. January’s sales pace was the strongest since February 2007, according to a new report by the National Association of Realtors (NAR).
Existing home sales, which include all housing types, rose 3.3 percent to a seasonally adjusted rate of 5.69 million in January. This was up from the upwardly revised 5.51 million sales the previous month.
January’s strong sales pace is also nearly 4 percent higher than last year, and surpassed November 2016 as the strongest pace on record since February 2007, when sales totaled 5.79 million.
The median price for an existing home rose 7.1 percent year-over-year to $228,900 last month. January was the 59th consecutive month that saw year-over-year price gains.
The national housing inventory was down 7.1 percent from last year, with 1.69 million existing homes for sale. Inventory has fallen year-over-year for 20 consecutive months. Meanwhile, unsold inventory remains at unchanged from December 2016 at a 3.6 month supply at the current sales pace.
Homes were on the market an average of 50 days, down from the 52 days recorded the previous month.
First-time homebuyers made up 33 percent of total home sales in January, up 1 percent from both the previous month and the previous year. According to the NAR, first-time homebuyers made up 35 percent of sales in 2016.
“Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home,” said NAR chief economist Lawrence Yun in a release.
However, while existing-home sales were off to a blazing start, serious delinquency rates on one to four family mortgages rose over the fourth quarter of 2016 from the previous quarter, according to a new report by the National Association of Home Builders (NAHB).
The percentage of mortgages that are seriously delinquent — that is 90 days or more late — rose 3.13 percent in the fourth quarter of 2016. The current serious delinquency rate still remains closer to its 10-year low than its recession-era peak, says the NAHB data.
The delinquency rate has garnered more attention from analysts following a decision made by the Trump Administration to suspend the 25 basis point cut to the annual mortgage insurance premium. And while there has been an overall decrease in delinquencies caused by job loss or income reduction, there has been a marked increase in “other” reasons — which could be anything from property abandonment, inability to sell or rent a property, or even transfer of ownership pending incarceration.
In the NAR release, Yun said that while market challenges haven’t abated just yet, the market is off to a “prosperous start.” As we move into the spring months, competition is likely to heat up as homebuyers search for homes in the entry-level and mid-market price points, he said.