Sales of existing homes have been trending upward over the past six months while inventories of available homes are at their lowest levels in seven years. Add the current very low mortgage interest rate environment and we may just have the ingredients for an increase in home sales.
The National Association of Realtors reported that re-sales of existing homes increased by 4.3% in January to a seasonally adjusted rate of 4.57 million and the percentage of first-time homebuyers increased to 33% of all sales (still below the 40% threshold considered to indicate a healthy market).
The supply of homes available for sale has fallen to 2.3 million, the lowest level since March 2005. At current rate of sales, it would take six months to clear this inventory, which is consistent with a healthy housing market and may help boost prices over time.
While sales were up acros the country in January, the West saw the biggest increase at nearly 9%.