January home sales decline, but changes may be seasonal
Posted on Monday, February 24, 2014 at 9:26:45 AM
Recent data from the National Association of Realtors indicated that January's existing-home sales declined for the month, although winter weather and other seasonal trends may be partly to blame.
Overall, the shifts shouldn't alarm anyone interested in residential financing. In total, NAR reported that existing-home sales decreased 5.1 percent in January compared to December, while the median price for these types of properties increased year-over-year to $188,900. Out of all of these completed transactions, only 11 percent were foreclosures, while short sales accounted for 4 percent.
Lawrence Yun, chief economist at NAR, attributed the changes to unusual weather patterns, which have taken their toll on all sorts of economic activity this season. As a result, housing growth may be hampered at least until warmer temperatures start to creep in.
The change in existing-home sales wasn't unforeseen, however. A survey of Bloomberg economists projected sales would drop for January, ranging from estimates of a 4.5 million pace to 4.9 million. The actual figure noted by NAR was a seasonally adjusted annual rate of 4.62 million.
In addition, Bloomberg supported the assertion that weather played a role. Across the country, homebuilders encountered difficult conditions, slowing their rate of construction and limiting the number of new homes entering the market.