U.S. home sales plunged 5.1 percent in January

Although harsh winter may have kept buyers from going to open houses, sales were also down in locations where weather wasn't a factor
Associated Press
Feb 22, 2014

 

Sales of existing U.S. homes plummeted in January to the worst pace in 18 months. Cold weather, limited supplies of homes on the market and higher buying costs held back purchases.

The National Association of Realtors said Friday that sales fell to a seasonally adjusted annual rate of 4.62 million units last month. That was down 5.1 percent from the December pace. The sales rate declined 5.1 percent over the previous 12 months.

Higher mortgage rates and higher prices have contributed to a slowdown in home buying in five of the past six months. Freezing temperatures and snowstorms have also caused most housing activity to slip this winter. The flagging sales suggest a deceleration from the momentum for much of 2013, when 5.09 million homes were sold, the most in seven years.

"Such a picture confirms that the U.S. housing market reached its peak at the end of 2013 and further reacceleration is unlikely near term," Annalisa Piazza of Newedge Strategy said in a research note.

Home building dipped 16 percent in January from December, the Commerce Department said this week. Signed contracts to buy homes plunged in December, foreshadowing the January drop-off, the Realtors said in a separate report.

The weather has kept would-be buyers from venturing to open houses, while construction crews have endured work stoppages.

But sales also declined in parts of the country where weather was less of a factor. This suggested that price pressures and tight inventories are also weighing on the real estate market.

Buying fell 7.3 percent in Western states, the region less affected by winter storms and where average prices are the highest. That decline was significantly larger than in the Northeast, South and Midwest. The median price of homes in the West is $273,500, almost double the median price in the Midwest.

The median price nationwide has risen 10.7 percent to $188,900 since January 2013. There are just 4.9 months of available inventory on the market, a sign that would-be buyers have relatively few homes to pick from and may choose to delay purchases.

Just 26 percent of sales last month were by first-time buyers. In a healthy market, that figure is closer to 40 percent. All cash-sales accounted for 33 percent of all purchases, evidence that investors continue to make up a sizable share of the sales.

Existing-home sales in a healthy market would approach 5.5 million, nearly 900,000 more than the January rate. Buying has slowed during the past six months.

Over the summer of 2013, home resales reached a pace of 5.39 million. But they began to slow in September as the costs of buying a home rose because of rising prices and higher mortgage rates.

The average rate on a 30-year mortgage rose to 4.33 percent this week from 4.28 percent the previous week. Rates surged about 1.25 percentage points from May through September, peaking at 4.6 percent. The increase began after the Federal Reserve signaled that it would start to slow its bond-buying program before the end of the year.

The Fed has reduced its monthly bond purchases from $85 billion to $65 billion in its last two policy meetings. The purchases are intended to push down longer-term interest rates and encourage more borrowing, spending and hiring.

Comments

Fromthe419

How can this be? Yesterday Coasterfan wrote
"This is another sign that - for more and more Americans - the economy continues to improve. People are willing to take on more debt than they were a few years ago.

Actually, the signs are everywhere. To name just a couple of many possible examples, home sales are up, new home construction is up, and houses are selling for more than they were a few years ago. Cedar Fair had a huge year in 2013, in no small part due to the fact that a rising number of people have more disposable income."

I thought things were going great and we were entering a new golden age under Prez Obama. Let's face it, things are bad here, in Europe and Asia. I honestly don't think we are gonna come out of this recession. The only liquidity out there is the monopoly money the Fed prints...there is only massive debt in the private and public sector and we are one bubble away from financial armageddon (stock market bubble anyone?). Instead of wasting disposable income, they should be saving and searching for return on investment. I still don't understand the term disposable income, why would I dispose of money I work hard for?

jacksonbrowne

Ha! I was thinking the same thing!

grumpy

It is as obvious as the nose on your face. Coasterfan is correct and the register is cherry picking stories and making things up. Coasterfan must be correct, he always is and has no need to use links or say where he gets his information from. If he says it it has to be true. (sarcasm off) It is why some folks use links and tell where their info comes from and some don't and can't understand why others don't just take their word for what they say they heard somewhere, but won't say where or even check the so-called facts.

DEATHnTAXES

No worries.

Tomorrow's story will be "home sales and new home construction up 30%".

JudgeMeNot

And toaster will be back praising 0-bama.

Contango

IMO, it's a wait & see situation.

Most telling will be when the traditional home selling season begins in March & Apr.

Also, interest rates aren't gonna stay low forever.

coasterfan

I would agree with Contango. I am in the process of selling my house at present, and our realtor said that January is always a very slow month for home sales. As a matter of fact, she actually encouraged us to wait until February to sign a 6-month contract with her, since 'traffic' for home buyers in January is almost non-existent.

Regarding providing links, I guess I could write them down when I read them. The thing is, links are only credible when they come from an unbiased source, and clearly, conservatives have no clue as to an unbiased source is. Here's a hint: if you see one newscaster talking to the camera, it could be news. If you see 2-3 people onscreen discussing a current topic, that's NOT news, it's an opinion/talk program. Fox has far too much of the latter, and people who don't know any better accept it as "news".

When conservatives cite the Drudge Report, Fox or other obviously slanted sources, it's the same as when religious folks use the Bible to prove the veracity of the Bible. Even if we Dems provide links to verify our info, would conservatives believe it? From what I've read here over the past year, the answer is an obvious 'no'. They still believe climate change is a hoax, and will continue to do so until enough of the polar ice cap melts that they find themselves underwater in their beachfront home.

Conservatives are going to think what they want to think. Even when we present ironclad proof, they don't believe it. If it goes against their mindset,they label it a conspiracy. Theirs is the anti- education, anti-science party. And they think we're the stupid ones. Fine with me. It's that 'we're absolutely certain we're correct" arrogance conservatives have that prevents the party from remaining relevant, and thus, keeps them from winning presidential elections.

Donegan

May you take a loss in the name of economic equity. You are dodging the point of your home has lost value and you may lose tons of money having to sit on it because your god has not improved anything except the numbers of those who cannot afford a new home.

Contango

Re: "she actually encouraged us to wait until February to sign a 6-month contract with her, since 'traffic' for home buyers in January is almost non-existent."

There are buyers in EVERY mo. for a myriad number of reasons, e.g. job transfers, et. al.

Reads like a non-aggressive salesperson - fire her *ss.

Remember: If you're not getting any showings or any offers, your price is too high.

Contango

Re: "Here's a hint:"

This is an article about the housing mkt. and you bring up FNC????

What an ideological fruitcake!

thinkagain's picture
thinkagain

Your anger/contempt for those with opposing viewpoints is your defining characteristic. Yours must be a lonely existence, and I'm sad for you.

I heard you won a trip for two to Hawaii...you went twice.

coasterfan

Here's one for you:

"Our viewers don't want to be informed. They want to feel informed".
-Chet Collier, one of the founders of Fox News

Donegan

" If you like your doctor, you will be able to keep your doctor. Period." B Obama
Right back at you. You support a liar.

Contango

Re: "Here's (snip).

So says the OPINION of CNN. Surprising huh?

http://www.cnn.com/2014/01/27/op...

Instead of focusing on this BS, work on aggressively selling your house, fire that "order taker" and get a REAL salesperson.

Your second wife divorcing you too? Two time loser?

The Big Dog's back

pooh, you have been predicting failure and collapse for 5 years now. How about a solid date so we all will know.

Contango

Re: "you (snip)"

Off topic.

Steve P

More people on welfare and food stamps that any time in our history, more people dropping out of the job market, another all time high, the highest sustained gas prices in history, over 5 million Americans lost or losing their private health care plans compliments of obzo, I could go on listing the failures but who has that much time. Piddle will only ignore the facts as he feeds the ducks...

grumpy

You quote something (from what context we have no idea) printed from an opinion piece, from a competitor as proof?
One more thing you might want to consider when making statements. Drudge reports rarley, VERY rarely write articles, 99.999% of the time all they do is aggregate articles papers and bloggers write. I have never seen an article Drudge Report wrote used here as a link. I doubt there is 4 articles a year that Drudge Report actually writes.

Steve P

Not that coaster would make something up or take something out of context but please provide a link, which you usually do or source.

Dr. Information

We can only pray that coaster is selling and planning their retirement in Detroit to sulk with all the other Obama lovers.

Darwin's choice

California, to be closer to his radiant mother nancy pelosi.

Contango

Re: "their retirement,"

Gonna be rough.

He's stated that his current and 'maybe' second-ex is a public school teacher.

He's written that his first wife financially took him to the cleaners.

Are progressive-socialists allowed to have enough money to retire anyways?

Where would they invest it? Certainly not in the 'greedy' stock market. :)

Steve P

Drop in housing sale, could it be that many of the long term foreclosed properties have finally sold for pennies on the dollar?