Prospects for the spring market look a bit brighter as January numbers show an increase in both the pace of existing home sales and the size of the unsold inventory. The National Association of Realtors® (NAR) said sales of pre-owned single-family houses, townhomes, condominiums, and cooperative apartments were at a seasonally adjusted annual rate of 4.00 million. This was an increase of 3.1 percent from the December rate of 3.88 million and was 1.7 percent below the pace in January 2023.  December sales figures were also revised slightly higher, cutting the previously reported year-over-year decline nearly in half to -3.7 percent.

Single-family home sales rose from 3.48 million in December to 3.6 million, a gain of 3.4 percent, and remained lower year-over-year by 1.4 percent. Condo sales were flat at an annual rate of 400,000 and were 4.8 percent lower than one year earlier.

Existing home sales beat analysts’ expectations, but not by much. The consensus forecast from Econoday was 3.97 million.

“While home sales remain sizably lower than a couple of years ago, January’s monthly gain is the start of more supply and demand,” said NAR Chief Economist Lawrence Yun. “Listings were modestly higher, and home buyers are taking advantage of lower mortgage rates compared to late last year.”

Those listings did expand in January, up 2.0 percent to 1.01 million units. This is estimated to be a 3.0-month supply at the current rate of sales, but that estimate is virtually unchanged from that in both December and January 2023. Properties typically remained on the market for 36 days in January, up from 29 days in December and 33 days in January 2023.

NAR’s current president Kevin Sears said the association has been pushing Congress to pass H.R. 1321, The More Homes on the Market Act. The bill would lower taxes on home sales and hopefully bring additional inventory to the market. “More listings will help Americans move,” Sears said.

Home prices continued to rise, posting the seventh consecutive month of annual price gains. The median for all residential sales climbed 5.1 percent to $379,100. The median single-family home price was up 5.0 percent to $383,500 while condo prices appreciated 5.7 percent to $321,100.

The median home price reached an all-time high for the month of January,” Yun said. “Multiple offers are common on mid-priced homes, and many homes were still sold within a month. The elevated share of cash deals – 32 percent – indicated a market full of multiple offers and propelled by record-high housing wealth.”

First-time buyers were responsible for 28 percent of January sales and individual investors and second-home buyers accounted for 17 percent. Only 2.0 percent of sales were considered to be distressed.

All four major regions posted annual price increases but only one saw annual growth in sales. In the Northeast the sales rate of 480,000 units was unchanged from December but 5.9 percent lower than in January 2023. Median prices jumped 10.1 percent to $434.300.

A 2.2 percent increase brought Midwest sales to an annual rate of 950,000 in January, down 3.1 percent for the year. The median price was $271,700, up 7.6 percent from January 2023.

Existing home sales in the South rose 4.0 percent from December to an annual rate of 1.84 million, closing to within 1.6 percent of sales 12 months earlier. Median prices were up 4.1 percent to $345,100.

Sales in the West rose 4.3 percent compared to December to 730,000 annual units, 2.8 percent higher than the prior January. The median price in the region gained 6.3 percent to $572,100.