Last month, 6.5 million houses and apartments changed hands, an increase of 6.7% while analysts expected a slight decline to 6.08 million.
Sales of existing homes were much stronger than expected in January, rebounding 6.7% from December as buyers rushed ahead of the expected rise in interest rates.
In the first month of 2022, 6.5 million homes and apartments changed hands, at an annualized rate, according to figures released Friday by the National Federation of American Realtors (NAR).
This surprised analysts who expected a slight drop from December, and expected 6.08 million properties sold.
The real estate market has experienced an unexpected boom during the COVID-19 pandemic thanks, in part, to falling interest rates, which has led to higher property prices and a scarcity of properties available for sale .
But the Fed is expected to raise rates next month for the first time since the crisis began, in order to combat runaway inflation, which is contributing to soaring house prices.
“Buyers were likely anticipating further rate hikes and a low rate lock-in, and investors added to aggregate demand with all-cash deals,” said Lawrence Yun, NAR’s chief economist, said Yun, quoted in the press release.
“As a result, housing prices continue to rise solidly,” he added.
Thus the median price of existing homes climbed to 350,300 dollars, or 15.4% more than the same month last year. And this is the 119th rise in a row, which NAR says is the longest streak on record.
Inventories fell to the equivalent of 1.6 months at the current sales pace, the lowest level on record.
Sales of existing homes also increased in all regions in January compared to the previous month, with the South recording the strongest increase (9.3%) ahead of the North-East (+6.8%). The Center and West saw sales increase by just over 4% over one month.
In the first phase of the crisis caused by COVID-19, mortgage rates were below 3.50%, even remaining below 3% for several months.
But then they rose due to high inflation and stronger-than-expected consumer spending. The 30-year fixed-rate mortgage is approaching 4%, reaching peaks not seen since May 2019.