Yes interest rates are on the rise, and yes there is concern about the effect of new tax legislation on the market but those factors are not the primary reason that existing homes sales have been dropping.
Existing home sales dropped for the second consecutive month in January, and experienced their largest annual decline in over three years, according to the National Association of Realtors (NAR). It is not because of a lack of buyers but there just are not enough houses. A serious inventory shortage is slowing U.S. housing markets.
Sales of existing homes fell by 3.2% in January to 5.38 million, with sales 4.8% down versus a year ago, the largest annual decline since August 2014.
The NAR cited the lack of inventory as the primary reason for the drop in sales.
NAR chief economist Lawrence Yun said.
It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth
The median existing-home price for all housing types in January was $240,500, up 5.8% from January 2017 ($227,300). January’s price increase marks the 71st straight month of year-over-year gains.
The problem of inventory may however ease in coming months.
January saw new home construction at its highest for almost a year. Housing starts jumped 9.7% to a seasonally adjusted annual rate of 1.326 million units, the highest level since October 2016.
Inventory in Wallingford is down 3.2% from the same time last year.
Wallingford PA Real Estate – Wallingford PA 19086