Following three consecutive months of increases, existing home closings declined in January, according to the National Association of Realtors This Week in Real Estate. Total existing home sales fell by 4.9% from the previous month. However, sales were 2.0% higher than in January 2024, marking the fourth consecutive month of year-over-year increases. The median existing-home sales price rose by 4.8% from the previous year, marking the 19th consecutive month of year-over-year increases and the highest price ever recorded for January. According to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, overall housing starts in January decreased by 9.8% from December and were 0.7% below January 2024 levels. Single-family housing starts were 8.4% below December results and declined by 1.8% year-over-year. Overall permits were 0.1% above December but 1.7% below January 2024, while permits for future single-family homebuilding remained unchanged from December. U.S. homebuilder confidence fell to a five-month low in February amid concerns that tariffs on imports, combined with elevated mortgage rates, would further drive-up housing costs. Below are key events from the third week of February impacting our business: EXISTING-HOME SALES DECREASED 4.9% IN JANUARY, BUT INCREASED YEAR-OVER-YEAR FOR FOURTH CONSECUTIVE MONTH. Total existing-home sales descended 4.9% from December to a seasonally adjusted annual rate of 4.08 million in January. Year-over-year, sales improved 2.0% (up from 4 million in January 2024). Total housing inventory registered at the end of January was 1.18 million units, up 3.5% from December and 16.8% from one year ago (1.01 million). Unsold inventory sits at a 3.5-month supply at the current sales pace, up from 3.2 months in December and 3.0 months in January 2024. The median existing-home price for all housing types in January was $396,900, up 4.8% from one year ago ($378,600). According to Freddie Mac, the 30-year fixed-rate mortgage the averaged 6.85% as of February 20. That’s down from 6.87% one week ago and 6.90% one year ago. Single-family home sales declined 5.2% to a seasonally adjusted annual rate of 3.68 million in January, up 2.2% from the previous year. The median existing single-family home price was $402,000 in January, up 5.0% from January 2024. Read the full story here.HOUSING STARTS RETREAT AT THE START OF 2025. Overall housing starts decreased 9.8% in January to a seasonally adjusted annual rate of 1.37 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. Within this overall number, single-family starts decreased 8.4% to a 993,000 seasonally adjusted annual rate; the January pace was 1.8% lower than a year ago. As mirrored in the NAHB/Wells Fargo HMI, high construction costs, elevated mortgage rates and challenging housing affordability conditions are causing builders to approach the market with caution. Overall permits increased 0.1% to a 1.48-million-unit annualized rate in January. Single-family permits were at a 996,000 annual unit rate, remaining unchanged compared to the previous month. The number of single-family homes under construction in January is down 6.3% from a year ago, to 641,000 units. Read the full story here.MORTGAGE RATES END WEEK AT LOWEST LEVELS SINCE DECEMBER 18TH. Rates dipped a pinky toe into the 6% range on Feb 5th and then a few more toes last Friday. Now today, we’re ending another week with damp digits, right in line with last Friday at the best levels since December 18th. Today’s improvement was initially driven by weak economic data this morning in the form of S&P Global’s service sector index dropping sharply to the lowest levels since the middle of 2023. Rates tend to benefit from economic weakness. The next leg of the improvement was mainly seen in underlying bond markets, and it came courtesy of a big stock market sell-off. Stock market weakness has a mixed relationship with bonds/rates. There are times where they move in unison and other times, in opposite directions. Today’s version involved organic, heavy selling in stocks which ultimately pushed some investors into the bond market as a safe haven. Read the full story here.
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