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Existing home sales in the United States declined in January to their lowest rate in nine months, but the pace was higher than a year ago for the fourth straight month, according to the latest index. The data from the National Association of Realtors all major regions experienced declines in January, with the Northeast and West seeing the largest. Total completed transactions fell 4.9% to a seasonally adjusted annual rate of 4.82 million in January, the lowest since last April from an upwardly-revised 5.07 million in December. Despite January’s decline, sales are higher by 3.2% than a year ago. Lawrence Yun, NAR chief economist, said that the housing market got off to a somewhat disappointing start to begin the year with January closings down throughout the country. ‘January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,’ he explained. ‘Real estate agents are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions,’ he added. Total housing inventory at the end of January increased 0.5% to 1.87 million existing homes available for sale, but is 0.5% lower than a year ago when it was 1.88 million. Unsold inventory is at a 4.7 month supply at the current sales pace, up from 4.4 months in December. The median existing home price for all housing types in January was $199,600, which is 6.2% above January 2014 and marks the 35thconsecutive month of year on year price gains. ‘Although sales cooled in January, home prices continued solid year on year growth. The labour market and economy are markedly improved compared to a year ago, which supports stronger buyer demand. The big test for housing will be the impact on affordability once rates rise,’ Yun pointed out. The data also shows that all cash sales were 27% of transactions in January, up from 26% in December 2014 but down from 33% in January of last year. Individual investors, who account for many cash sales, purchased 17% of homes in January, unchanged from last month and below January 2014 when it was 20%. Some 67% of investors paid cash in January. Distressed sales, that is foreclosures and short sales, were 11% of sales in January, unchanged from last month but down from 15% a year ago. Some 8% of January sales were foreclosures and 3% were short sales. Foreclosures sold for an average discount of 15% below market value in January, unchanged from December, while short sales were discounted 12%, also unchanged from last month. Properties typically stayed on the market slightly longer in January at 69 days than December at 66 days and a year ago at 67 days. Short sales were on the market the longest at a median of 128 days in January, while foreclosures… Continue reading →