Existing Home Sales, Prices Rise in January

Existing home sales edged up and home prices continued to rise steadily in January, according to the National Association of Realtors (NAR), which is predicting the dawn of a seller's market caused by increasingly limited inventory.

Total existing home sales increased 0.4 percent to a seasonally adjusted annual rate of 4.92 million in January, from a downwardly revised 4.90 million in December, reaching 9.1 percent above the 4.51 million-unit pace in January 2012. (Existing home sales are categorized as completed transactions that include single-family homes, townhomes, condominiums and co-ops.)

"Buyer traffic is continuing to pick up, while seller traffic is holding steady," said Lawrence Yun, the NAR's chief economist. "In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country."

Total housing inventory fell 4.9 percent to 1.74 million existing homes available for sale at the end of January, representing a 4.2-month supply at the current sales pace. Inventory is down from 4.5 months in December, and represents the lowest housing supply since April 2005, when it was also 4.2 months. Raw unsold inventory is at the lowest level since December 1999, when there were 1.71 million homes on the market.

Single-family home sales increased 0.2 percent to a seasonally adjusted annual rate of 4.34 million in January from 4.33 million in December, and are 8.5 percent above the 4.00 million-unit level in January 2012. The median existing single-family home price was $174,100 in January, up 12.6 percent from a year ago. The national median existing home price for all housing types was $173,600 in January, up 12.3 percent from January 2012, the 11th consecutive month of year-over-year price increases. The January gain is the strongest since November 2005, when it was 12.9 percent above a year earlier.