The U.S. housing market began the year in a state of rebalance, with many buyers and sellers remaining cautious while they wait to see where the market is headed. Nationally, pending sales rose 2.5% month-to-month, marking the first increase since May, while sales of existing homes fell 1.5% as of last measure, according to the National Association of Realtors® (NAR). Demand for housing persists, but higher mortgage interest rates have cut into housing affordability, with total home sales down 17.8% last year compared to 2021.
New listings decreased 17.3% for residential homes and 25.6% for townhouse/condo homes. Pending sales decreased 13.5% for residential homes and 22.9% for townhouse/condo homes. Inventory increased two percent for residential homes but decreased 16.2% for townhouse/condo homes.
Median sales price increased 0.2% to $241,250 for residential homes and 11.7% to $208,000 for townhouse/condo homes. Days on Market increased 27.3% for residential homes but decreased five percent for townhouse/condo homes. Months supply of inventory increased 20% for residential homes but remained flat for townhouse/condo homes.
As sales slow, time on market is increasing, with the average home spending 26 days on market as of last measure, according to NAR. Seller concessions have made a comeback, giving buyers more time, and negotiating power when shopping for a home. Although home prices remain high, mortgage rates declined steadily throughout January, falling to their lowest level since September, sparking a recent surge in mortgage demand. Lower rates should aid in affordability and may soon lead to an uptick in market activity ahead of the spring selling season.