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US existing home sales edge up as supply plummets: report

·1-min read
The supply of homes for sale has dropped to a record low amid the hot US housing market

The hot US housing market continued in January as sales of existing homes rose again, but high demand drove supply to a record low, according to industry data released Friday.

Home sales have remained solid, consistently one of the strongest sectors of the pandemic-ravaged US economy, fueled by record low borrowing costs, even as builders have struggled to keep up with demand.

Sales of existing single-family homes, townhomes, condominiums and co-ops increased 0.6 percent from December to a seasonally-adjusted annual rate of 6.69 million in January, the National Association of Realtors (NAR) said.

That put sales up 23.7 percent from the 5.41 million annual rate in January 2020, the data showed.

"Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market," NAR chief economist Lawrence Yun said in a statement.

"Sales easily could have been even 20 percent higher if there had been more inventory and more choices."

Total housing inventory at the end of January fell 1.9 percent to just over a million units, 25.7 percent below January 2020, the report said.

However, the hot buying environment has continued to push prices higher, driving the median existing-home price in January to $303,900, up 14.1 percent from January 2020, marking 107 straight months of year-over-year gains.

While strong sales are expected to continue this year, "a lack of supply and eroding affordability are expected to lead to a moderately slower pace of existing home sales relative to their late 2020 momentum," said Nancy Vanden Houten of Oxford Economics.

hs/bfm