Sales of previously occupied U.S. homes rose again last month, a sign that the housing market’s strong momentum from 2020 may be carrying over into this year.
Existing U.S. home sales rose 0.6% in January from the previous month to a seasonally-adjusted rate of 6.69 million annualized units, the National Association of Realtors said Friday. Sales rose 23.7% from a year earlier. It was the strongest sales pace since October.
Home prices also rose. The U.S. median home price was $303,900 in January, an increase of 14.1% from a year earlier.
The red-hot housing market has left the number of available properties for sale at record lows, which has contributed to sharp increases in prices.
At the end of January, there were only 1.04 million homes for sale, a decline of 26% and an all-time low, NAR said. At the current sales pace, that amounts to a 1.9 months’ supply, down from a 3.1 months' supply in January 2020.
The housing market has mounted a strong comeback since last summer after declining sharply in the spring when the coronavirus outbreak hit. Sales surged last year to the highest level since 2006 at the height of the housing boom.
Several market trends are helping drive the strong demand for homeownership. Mortgage rates remain at historic lows. Americans forced to work from home in the pandemic are seeking larger homes. And more millennials are now entering the market.
That demand dynamic, combined with a stubbornly low supply of homes for sale, will likely lead to fierce competition among buyers during the traditional homebuying season this spring.