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First Cut: Sales and prices of existing homes frosty in January

Sales of existing homes dipped 1.2% in January to 4.94 million units (SAAR) after a revised 5.00 million units in December (previously 4.99 million units). Sales were down 8.5% compared to the 5.40 million units in January 2018. The report included annual revisions. The month-over-month decline was concentrated in sales of single-family units at 4.37 million, down 1.8% from 4.45 million in December, and off 8.4% from a year-ago. The more volatile multi-unit sector increased 3.6% to 570,000 in January from 550,000 in December, but was down 9.5% from the year-ago month.

Sales were down in three of four regions, although declines were not unusually disparate. The South was down 1.0%, the Midwest was down 2.5%, and the West was down 2.9%. Some of this may reflect a lack of housing stock after the hurricanes and wildfires. The Northeast gained 2.9%.

Prices were also off month-over-month, with the median prices falling 2.8% to $247,500 but up 2.8% from January 2018. Single family unit prices have held up better compared to a year earlier at up 3.1%, while multi-unit prices had only a meager 0.1% rise.

With mortgage interest rates sliding from the high of 4.87% in November to 4.46% in January, and prices rising less rapidly, soft sales are probably related more to economic uncertainties, winter weather, and lack of supply for the more sought-after units.

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