The headlines for existing home sales say that sales “cooled” to their lowest rate in nine months but sales volumes were up from one year ago. Our analysis of the unadjusted data shows the unadjusted three month rolling averages for sales decelerating but remaining in positive territory after being in contraction most of 2014.
Econintersect Analysis:
NAR reported:
Unadjusted Year-over-Year Change in Existing Home Sales Volumes (blue line) – 3 Month Rolling Average (red line)
The graph below presents unadjusted home sales volumes.
Unadjusted Monthly Home Sales Volumes
Here are the headline words from the NAR analysts:
Lawrence Yun, NAR chief economist, says 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 said. “Realtors® are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
“Although sales cooled in January, home prices continued solid year-over-year growth,” adds Yun. “The labor 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.”
NAR President Chris Polychron says that the Federal Housing Administration’s overly restrictive approval process limits buyers’ access to condos even though these properties are among the strongest in the agency’s portfolio. “Condominiums offer an affordable option and are the first step to homeownership for many homebuyers. NAR has urged the FHA to develop policies that will give buyers access to more flexible and affordable financing opportunities and a wider choice of approved condo developments.”
