by Calculated Risk on 2/21/2014 10:00:00 AM

The NAR reports: Existing-Home Sales Drop in January While Prices Continue to Grow

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 5.1 percent to a seasonally adjusted annual rate of 4.62 million in January from 4.87 million in December, and are also 5.1 percent below the 4.87 million-unit pace in January 2013. Last month’s level of activity was the slowest since July 2012, when it stood at 4.59 million.
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Total housing inventory at the end of January rose 2.2 percent to 1.90 million existing homes available for sale, which represents a 4.9-month supply at the current sales pace, up from 4.6 months in December. Unsold inventory is 7.3 percent above a year ago, when there was a 4.4-month supply.

Click on graph for larger image.

This graph shows existing home sales, on a Seasonally Adjusted Annual Rate (SAAR) basis since 1993.

Sales in January (4.62 million SAAR) were 5.1% lower than last month, and were 5.1% below the January 2013 rate.

The second graph shows nationwide inventory for existing homes.

According to the NAR, inventory increased to 1.90 million in January from 1.86 million in December.   Inventory is not seasonally adjusted, and inventory usually increases from the seasonal lows in December and January, and peaks in mid-to-late summer.

The third graph shows the year-over-year (YoY) change in reported existing home inventory and months-of-supply. Since inventory is not seasonally adjusted, it really helps to look at the YoY change. Note: Months-of-supply is based on the seasonally adjusted sales and not seasonally adjusted inventory.

Inventory increased 7.3% year-over-year in January compared to January 2013.   This year-over-year increase in inventory suggests inventory bottomed earlier last year.

Months of supply was at 4.9 months in January.

This was slightly below expectations of sales of 4.70 million.  For existing home sales, the key number is inventory - and the key story is inventory is still low, but up year-over-year.    I'll have more later ...