MNI DATA REACT: January Existing Home Sales -1.3% TO 5.46 Mln

By Brooke Migdon

     WASHINGTON (MNI) - Existing home sales retreated slightly in January,

declining 1.3% to a 5.46 million annualized pace after hitting the strongest

pace in nearly two years a month earlier, according to data released Friday by

the National Association of Realtors.

     From one year ago, sales were higher by 9.6%, marking the seventh

consecutive month of y/y gains. If sales continue to hold at January's pace

through the rest of the year, 2020 sales would surpass total 2019 figures, NAR

chief economist Lawrence Yun told reporters Friday.

     But despite "solid" home sales, a nationwide inventory shortage continues

to push up prices, dampening prospects for a stronger 2020. In January, the

median home price was $266,300, down slightly from December but up 6.8% y/y and

outpacing wage growth by nearly two times, according to Yun.

     Yun said an increase in housing starts in January was "encouraging news"

that could bring more inventory to the market. January building permits also hit

the highest level since March 2007.

     Yun said home sales are moving "sideways" even though the economic backdrop

is largely favorable, citing solid job creation, low unemployment and high

consumer confidence.

     Regionally, month-over-month sales increased in the Midwest (+2.4%) and the

South (+0.4%), but fell in the West (-9.4%) and were flat in the Northeast. Yun

noted that affordability challenges in the West, the most expensive region in

the United States, could be hurting monthly sales.

     Single-family home sales declined 1.2% in January while condominiums sales

dropped 1.6%.

     First-time buyers made up 32% of January sales, up from 29% one year ago.

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

[TOPICS: MAUDS$,M$U$$$]