A brief drop in mortgage rates towards 6.0 percent was not enough to entice buyers in January.

Existing home sales from the National Association of Realtors via St. Louis Fed

The National Association of Realtors (NAR) reports Existing-Home Sales Decline 0.7% in January

Key Highlights

• Existing-home sales waned for the twelfth consecutive month to a seasonally adjusted annual rate of 4.00 million. Sales slipped 0.7% from December 2022 and 36.9% from the previous year.
• The median existing-home sales price increased 1.3% from one year ago to $359,000.
• The median existing-home price for all housing types in January was $359,000, an increase of 1.3% from January 2022 ($354,300), as prices climbed in three out of four U.S. regions while falling in the West. This marks 131 consecutive months of year-over-year increases, the longest-running streak on record.
• Existing-home sales totaled 5.03 million in 2022, down 17.8% from 2021, as last year’s rapidly escalating interest rate environment weighed on the residential real estate market.
• Total housing inventory registered at the end of January was 980,000 units, up 2.1% from December and 15.3% from one year ago (850,000). Unsold inventory sits at a 2.9-month supply at the current sales pace, unchanged from December but up from 1.6 months in January 2022.
• First-time buyers were responsible for 31% of sales in January, identical to December but up from 27% in January 2022. NAR’s 2022 Profile of Home Buyers and Sellers – released in November 2022 – found that the annual share of first-time buyers was 26%, the lowest since NAR began tracking the data.
• All-cash sales accounted for 29% of transactions in January, up from 28% in December and 27% in January 2022.

Existing Home Sales Supply

Existing-Home Sales Month-Over-Month

Track Record

• It's been a perfect record, down every month for a full year. 
• January of 2022 was the last time to buy before mortgage rates soared.
• Sales declined 0.7 percent from December 2022 
• Sales are down 36.9 percent from a year ago.

Housing Starts Drop Another 4.5 Percent to a New Post-Covid Low

Housing Starts, Permits, Completions from Census Department, chart by Mish

On February 16, I reported Housing Starts Drop Another 4.5 Percent to a New Post-Covid Low

There's yet another decline in housing starts with more negative revisions by the Census Department.

How the Fed Messes With People's Lives From a Mortgage Rate Perspective

A four-month decline in mortgage rates is over. Rates dipped to 6.0 percent in early February but are now back up to 6.80 percent. 

Let's discuss what this means to the home buyer and how the Fed has messed with people's lives over time.

For discussion, please see How the Fed Messes With People's Lives From a Mortgage Rate Perspective.

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