January Real Estate Market Report: Sales Rise 3.1%, but Rising Mortgage Rates Pose Challenges

The real estate market in January showed some positive signs, with a 3.1% increase in sales of previously owned homes compared to the previous month. However, there was still a 1.7% decrease in sales compared to the same period last year. The increase in sales could be attributed to lower mortgage rates compared to the end of the previous year, although rates have risen again since then.

Median home price reaches an all-time high in January
Median home price reaches an all-time high in January, up 5.1%.

One notable trend is the rise in inventory, with 3.1% more homes available for sale compared to January 2023. However, this increase hasn’t significantly alleviated the supply shortage, as the inventory level remains at a low three-month supply.

This scarcity of supply continues to put upward pressure on home prices, with the median existing home price reaching an all-time high for January at $379,100, up 5.1% from the previous year.

The competitive nature of the market is evident in the prevalence of multiple offers, particularly on mid-priced homes, with a significant portion of homes selling above the listing price.

Cash deals surge to 32%
Cash deals surge to 32%, signaling fierce competition in the real estate market.

Cash deals also remain high, comprising 32% of sales, indicating intense competition among buyers. However, first-time buyers are struggling due to a lack of affordable options in the market.

Despite the increase in new listings, signed contracts have declined compared to the previous year, suggesting that higher mortgage rates are already impacting buyer demand. This indicates a potential slowdown in the market going forward, as affordability becomes more challenging for buyers.

Sajda Parveen
Sajda Parveen
Sajda Praveen is a market expert. She has over 6 years of experience in the field and she shares her expertise with readers. You can reach out to her at [email protected]
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