US home sales surge 6.7% in January due to low inventory

• Existing-home sales move upwards to an annual rate of 6.70 million

• January sales waned 2.3% year on year

U.S home sales increased 6.7 % in January amid record-low inventory and higher prices, according to the National Association of Realtors.

The National Association of Realtors said Friday that existing-home sales jumped from the previous month to a seasonally adjusted annual rate of 6.50 million in January. Year-over-year, sales fell 2.3%. 

"Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers," said Lawrence Yun, NAR's chief economist. "Consequently, housing prices continue to move solidly higher."

Read more: US inflation reaches 7.5 % in January, highest since February 1982

The total housing inventory at the end of November was 860,000 units, down 2.3% from December and down 16.5% from one year ago. At the current sales rate, unsold inventory has a 1.6-month supply, a decrease from both the previous month and a year ago.

Homes priced at $500,000 and lower are vanishing, according to Yun, while supply in the upper price range has increased. 

As prices grew in each region, the median existing-home price for all housing types in January was $350,300, up 15.4 % from January 2021. 

Read more: US consumer sentiment sinks in early February amid inflation concerns

Regional Breakdown

In November, existing-home sales in the Northeast grew 6.8% in January and recorded an annual pace of 780,000 while in the Midwest it increased by 4.1 % to 1,510,000. 

Read more: US jobless claims increase but hover near historic low

In the South jumped 9.3 % in January, to a yearly rate of 2,940,000 whereas in the West it climbed 4.1 % in November, hitting an annual average of 1,270,000. 

Picture Credits: CNBC