Existing home sales lagged sales of new homes throughout 2016, but the resale market opens 2017 on a very strong note. Existing home sales jumped 3.3 percent in January to a 5.690 million rate that is well beyond Econoday's 5.580 million consensus. January's rate is the very best of the economic cycle, since the end of the prior cycle in February 2007.
Single-family homes are the key component of the report and results here are nearly as strong as the headline, up 2.6 percent in the month at a 5.040 million rate. Condos are the second component and they are especially strong, up 8.3 percent in the month to a 650,000 rate. Year-on-year, condo sales are up 4.8 percent vs 3.7 percent for single-family homes and vs 3.8 percent for total resales.
The strength of January came despite a very thin selection, at 1.690 million single-family homes and condos on the market which, at January's sales rate, comes out to only 3.6 months of supply which is unchanged from December. But the thin supply is not driving up prices which points to seller concessions. The median price fell 1.9 percent in the month to $228,900 which, however, is strong relative to last January for a 7.1 percent gain.
Other details are in trend including a 7 percent share for distressed sales, a 23 percent share for all cash sales, and a constructive 33 percent rate for first time buyers. Regional sales data show the West out in front at an 8.4 percent year-on-year gain with the Midwest the only one in the negative column at minus 1.5 percent.
Lack of supply is a risk for further gains in existing home sales which otherwise are beginning to trend higher. Watch for the FHFA house price index on tomorrow's calendar followed on Friday by new home sales, both of which are also expected to show strength.
Amid unusually low supply in the market, existing home sales have continued to struggle, trending only modestly higher. But the advance indication on this report (pending home sales) rose sharply and forecasters see a strong gain in January to a 5.580 million rate, up 1.6 percent from Decembers 5.490 million.