The US housing market remains on shaky ground with the latest data from the National Association of Realtors showing home sales falling for the 12th straight month.
The NAR survey, released Tuesday, showed January home sales fell 36.9 percent to 4 million, down from 6.34 million in January 2022.
“Home sales are bottoming out,” said Lawrence Yun, NAR’s chief economist.
“Prices vary depending on the affordability of a market, with the lowest priced regions seeing modest growth and the most expensive regions seeing declines.”
The decline was nationwide, but steepest in the West, where sales fell 42.4 percent year-over-year. The median price in the West is the most expensive in the country at $525,200, down 4.6 percent from January 2022.
Steiner Street and Alamo Square, a famous Victorian location in San Francisco, California, where home prices fell 1 percent to $1.78 million between 2021 and 2022. The drop marks the first annual decline the city has seen in a decade.
In the Northeast they fell by 35.9 percent; in the south 36.6 percent.
The Midwest fared slightly better, with existing home sales falling 33.3 percent.
The median home in the Northeast was at $383,000; in the South it was $332,500; while in the Midwest it was the cheapest in the country, at $252,300.
The median existing home price for all home types in January was $359,000, an increase of 1.3 percent from January 2022, when the figure was $354,300.
Cities where home prices are declining include San Francisco and San Jose, both in California, and Austin, Texas.
San Jose had one of the biggest drops, but remains the most expensive place to buy a home in the country at a median price of $1,577,500. Prices peaked at $1.9 million in early 2022.
Median home prices in San Francisco fell 1 percent to $1.78 million between 2021 and 2022 in the first annual drop the city has seen in a decade, according to new data from Compass.
And in Austin, homes remain expensive at a median price of $525,250 in December, but the number represents a 5.4 percent drop from December 2021, according to KVUE.
The sluggishness of the market is due in large part to stubbornly high mortgage rates.
A 30-year fixed mortgage will currently be at 6.32 percent, significantly higher than the sub-3 percent rates seen in 2020.
Rates have been above 6 percent since mid-2022.
“Houses stay on the market longer,” Yun said.
‘But there are fewer new listings on the market this January compared to last January.
“This is because homeowners love their low interest rate and don’t want to give it up and put their home on the market.”
Austin, Texas is one of 20 cities that has seen single-family home prices drop. The decline in existing home sales in January was nationwide, but steepest in the West, where sales fell 42.4% year-over-year.
Homes in Austin, Texas remain expensive at a median price of $525,250 in December
The median price in the West is the most expensive in the country at $525,200, down 4.6 percent from January 2022. Pictured are homes in San Francisco, one of the most expensive cities in the United States.
The typical home was on the market for 33 days in January, a significant increase from 19 days a year earlier.
Nearly a third of sales in January, 31 percent, were made by first-time buyers; a slight increase compared to January 2022.
More than a quarter, 29 percent, were cash sales, up from 28 percent in December and 27 percent in January 2022.
Distressed sales (foreclosures and short sales) accounted for 1 percent of sales in January, the same as last month and a year ago.
Earlier this month, the NAR analysis showed 20 major US cities that have seen home prices fall in the past year, four of which are in California.
“Some markets may see double-digit price drops, especially some of the more expensive parts of the country, which have also seen weaker employment and more cases of residents moving to other areas,” Yun said.
Yun said the slowdown represents a break from markets that experienced a massive price boom during the pandemic.
“A slowdown in house prices is taking place and it is welcome, particularly as the typical house price has risen 42 percent in the last three years,” Yun said, noting that these cost increases have outpaced You grow wage increases and consumer price inflation since 2019.
Only 20 of the top 186 markets tracked by NAR saw single-family home price declines in the fourth quarter, but experts suggest there may be more to come.
Other markets that have seen prices fall include Boulder, Colo., down 2.0 percent; Austin Texas with 1.3 percent; and Boise, Idaho at 3.4 percent.
In fact, Bay Area homes are selling below their listing price for the first time in 10 years, according to the San Jose Mercury News.
Daryl Fairweather, chief economist at Redfin, told Mercury News that it represents the largest exodus from the region, driven by remote work, especially in the tech sector.
“We can see this new normal where the San Francisco Bay Area is more like the rest of the country,” he said.