US sales of existing homes rose again in January to hit their fastest pace in nearly a decade despite rising prices and mortgage rates, according to data released Wednesday.
The pop in sales suggested recent consumer confidence and robust job gains again bolstered homebuyers’ willingness to sign on the dotted line.
Sales of condos, single-family homes, townhouses and other pre-owned homes gained 3.3 percent for the month, hitting a seasonally adjusted rate of 5.69 million units, the National Association of Realtors said in its monthly report.
The sales rate was the strongest since February 2007, and was 3.8 percent higher than January 2016.
All major regions except the Midwest saw gains, with sales in the western United States rising 6.6 percent year-over-year.
A consensus forecast among analysts had expected strong sales growth to continue but at a slower nationwide annual rate of 5.57 million units sold.
“Market challenges remain but the housing market is off to a prosperous start as homebuyers staved off inventory levels that are far from adequate and deteriorating affordability conditions,”NAR chief economist Lawrence Yun said in a statement.
The median home price rose 7.1 percent over January last year to $228,900 — marking 59 consecutive months of year-over-year gains.
“Competition is likely to heat up even more heading into the spring for house hunters looking for homes in the lower- and mid-market price range,” Yun said.
Ian Shepherdson of Pantheon Macroeconomics said the sales rate had outstripped the pace of pending sales, suggesting a correction could occur.
Nominal mortgage rates had risen since November’s election rate but real rates remained below zero, he added.
“At the same time, mortgage lending standards are easing again after tightening last year,” he wrote in a client note.
“Accordingly we are a bit less gloomy about housing than a couple of months ago but sales will not continue to rise at their recent pace.”
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