Home sales make a 'strong start' to 2020
U.S. sales of previously owned homes last month fell 1.3% from December — but January's sales were up a stunning 9.6% versus a year ago.
“Existing-home sales are off to a strong start" this year, says Lawrence Yun, chief economist for the National Association of Realtors.
As sales rise, so do prices. Last month's national median price for a home was $266,300, up 6.8% from a year earlier, when the median was $249,400.
"Mortgage rates have helped with affordability, but it is supply conditions that are driving price growth," Yun said Friday, in a news release.
Rates have dropped to their best levels in years and are approaching all-time lows. Thirty-year fixed-rate mortgages are averaging 3.49%, according to mortgage company Freddie Mac, and that's not far from 2012's record low of 3.31%.
This calculator will show you the affordable monthly payments that are possible with today's rock-bottom mortgage rates:
Supplies of homes are super tight
As for those "supply conditions," the Realtors' trade group says the number of U.S. homes on the market last month was the lowest for any January since 1999. But the hope is that supplies will improve as builders get building.
The Commerce Department reported earlier this week that housing starts last month skyrocketed 21.4% compared to the level of a year ago, and building permits were close to a 13-year high.
"The trend line for housing starts is increasing and showing steady improvement, which should ultimately lead to more home sales," Yun says.
Meanwhile, first-time homebuyers are managing to carve out a greater share of home sales, despite the challenges. Last month they were responsible for 32% of all home purchases, up from 31% in December.
"It is good to see first-time buyers slowly stepping into the market," says Yun. "The rise in the homeownership rate among the younger adults, under 35, and minority households means an increasing number of Americans can build wealth by owning real estate."
To grab your piece of the American dream, start by checking out today's best mortgage rates where you live.
Then, get preapproved for a home loan — before you start looking at houses.