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New American Focus:
Mortgage & Real Estate

New American Focus: Mortgage & Real Estate

Translating the complexity of the markets into a concise and easy to digest format. Watch videos, read blogs, and view key data on short and medium term trends impacting interest rates, so you can make the right decision for your situation.

Home Sales Continued Hot Streak in January

Sold sign family | Home Sales Continued Hot Streak in January

Home sales continued rising in January, proving that the brief slowdown back in November was just a minor bump in the road for a housing market that’s basically hotter than it’s ever been.

According to new data from the National Association of Realtors and Census Bureau and the Department of Housing and Urban Development, both existing home and new home sales rose in January, continuing their climb from December’s elevated totals.

Home sales fell in November for the first time in many months, but it appears that decline is fully in the rearview mirror.

According to the National Association of Realtors, existing home sales rose by 0.6% in January 2021 compared to December 2020 but were up 23.7% from January 2020. The increase in existing home sales in January marks the seventh time in eight months that figure has risen.

And according to NAR Chief Economist Lawrence Yun, homes sales could have been even hotter if not for lack of inventory.

"Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market," Yun said. "Sales easily could have been even 20% higher if there had been more inventory and more choices."

As for how quickly those available homes are disappearing from the market, NAR data shows that properties typically stayed on the market for just 21 days in January, selling more than twice as fast as they did in January 2020 when homes stayed on the market for 43 days.

New home sales were just as hot as existing homes.

According to data from the Census and HUD, new home sales were up 4.3% in January 2021 compared to December 2020 and up 19.3% compared to January 2020.

Home builders are undoubtedly pleased to see the demand for new homes continuing, but the National Association of Home Builders cautions that rising construction costs are making it more difficult to build homes at a time when they are sorely needed.

“With existing home inventory at all-time lows, the demand for new construction remains strong,” said NAHB Chief Economist Robert Dietz. “Though, rising building and development costs, combined with recent increases in mortgage interest rates, threaten to exacerbate existing affordability conditions.”

Despite those concerns, Yun expects housing to maintain its performance over the course of this year.

"Home sales are continuing to play a part in propping up the economy," Yun said. "With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year."

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