Existing Home Sales in the U.S. grew 4.3 per cent in January, topping consensus expectations, but below estimates after a surprising lower revision for December, data from the National Association of Realtors shows.
The annual pace of sales grew to 4.57 million. December’s sales pace was lowered from 4.61 million to 4.38 million.
Economists polled by Bloomberg were expecting a 1.1 per cent gain for January, to an annual pace of 4.66 million.
“The uptrend in home sales is in line with all of the underlying fundamentals – pent-up household formation, record-low mortgage interest rates, bargain home prices, sustained job creation and rising rents,” NAR Chief Economist Lawrence Yun said.
Inventory in the U.S. fell 0.4 per cent to 2.31 million units, or a 6.1 month supply at the current sales pace. That is lower than the 6.4 month supply in December, and November’s 7.2 month supply.
However, median home prices declined 2 per cent year-on-year in January, to $154,700, with foreclosure and short sales accounting for 35 per cent of all transactions. That’s slightly below year ago levels, but three percentage points above December’s levels.
Contract failures also remained exceptionally high, with 33 per cent of NAR members reporting a failure. Failures stood at only 9 per cent in January 2011.
Data from the National Association of Realtors has come under intense scrutiny recently, after it announced that it would have to revise four years of home sales after finding it had double counted some sales.
The cuts ultimately represented the loss of more than two million home sales from an inflated rate. Sales were actually 17.7 million from 2007 through 2010, 14 per cent less than originally reported.
Today’s major data announcement in the U.S. is moments away: Existing Home Sales.
Economists polled by Bloomberg forecast month-on-month growth of 1.1 per cent, to an annualized rate of 4.66 million. That’s slower than a 5.0 per cent gain seen in December.
December’s pace slightly missed expectations, with consensus for a 5.2 per cent sequential gain.
For all of 2011, some 4.26 million units were sold, representing a 1.7 per cent increase against 2010.
“The pattern of home sales in recent months demonstrates a market in recovery,” Lawrence Yun, NAR chief economist, said in January. “Record low mortgage interest rates, job growth and bargain home prices are giving more consumers the confidence they need to enter the market.”
Financing remained a key issue for many closings in December, with more than 30% of NAR members reporting contract failures during the period. That rate stood at 9% in December 2010.