The numbers: U.S. home sales rose 0.6 percent in the U.S. to a seasonally adjusted annual rate of 6.69 million, the National Association of Realtors said Friday. Compared to a year ago, home sales increased by 23.7%.
Economists polled by The Wall Street Journal predicted that existing home sales would drop to an average rate of 6.66 million.
What happened: The average price for existing homes rose to $ 303,900 in January, up 14.1% from a year ago.
The stock of homes for sale fell to a record low of 1.04 million units by the end of January. This is a decrease of 25.7% on an annual basis. The market had 1.9 months of homes for sale. A 6-month stock is considered a sign of a balanced market.
The south and west showed an increase in sales in January.
Big picture: Sales have moved sideways since it was a high cycle in October. Economists believe that low mortgage rates will continue to increase household demand in the coming months. Buyers are also looking for more space and more remote locations in the wake of the pandemic.
What the NAR said: “Home sales continue to rise in the first month of the year, as buyers quickly snatch away every new listing that comes on the market. Sales could easily have been as much as 20% higher if there had been more stock and more choices, ”says Lawrence Yun, NAR’s chief economist.
What do economists say? ‘In general, the record low mortgage rates and families fleeing more stressful living conditions have boosted demand for single-family homes, despite the ongoing turmoil in the labor market and higher house prices. It is indeed one sector that is emerging stronger from the crisis than it has been in, ‘says Josh Shapiro, chief economist at US MFR Inc.
Market reaction: US stocks opened higher on Friday with the S&P 500 index SPX,
with 12.48 points in the middle of the day, after declining over the past three trading sessions.