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Weather Blamed For Existing Home Sales Drop

  • Written by Syndicated Publisher 1 Comment1 Comment Comments
    February 24, 2014

    The National Association of Realtors reported that sales of existing homes fell 5.1 percent last month, from an annual rate of 4.87 million units in December to 4.62 million in January, due in large part to bad weather and low inventory.

    Home prices also continued to rise and, combined with higher mortgage rates, these factors kept some buyers away as well during what is normally a very slow time of the year for home sales, requiring large seasonal adjustments that can make the data difficult to interpret.

    January Existing Home Sales

    The January sales rate was the lowest since July 2012 as first time buyers dropped to a record low of just 26 percent. Only 11 percent of January sales were foreclosures and 4 percent were short sales, down sharply from a year ago, as all-cash sales accounted for  33 percent of transactions. Investors were behind 20 percent of all home purchases last month with 70 percent of these being cash transactions.

    Consistent with seasonal price weakness that is to be expected at this time of the year, the median existing home price fell from $198,000 in December to $188,900 last month, however, home values are 10.7 percent higher than a year ago.

    Particularly after a winter like this, it’s a good idea to wait until spring to draw any conclusions about the health of the nation’s housing market.

    Images: via Flickr (licence attribution)

    About The Author

    As you may have already deduced, this is not your typical financial blog, accompanied by some run-of-the-mill investment newsletter, and I’m not your typical financial writer.

    In fact, I spent my entire working career as an engineer before retiring back in 2007 at the tender young age of 46. Two years prior to that in 2005 I started writing a blog – The Mess That Greenspan Made – mostly just to poke fun at the housing bubble and the policy makers who had led us down that path.

    Details about the investment newsletter and information about the performance of the associated “model portfolio” can be found here and if there are any questions that I can help answer, just send mail to tim@iaconoresearch.com.


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