• January existing home sales data showed sales rising 3.3 percent from December, to 5.69 million (SAAR), the strongest month since February 2007 and the fourth month in the past five in which existing sales have outperformed expectations.
• Much of January’s increase was driven by strength in condo sales, which rose 8.3 percent from December, compared to a 2.6 percent monthly rise in sales of single-family homes.
• The median existing-home price in January was $228,900, up 7.1 percent from January 2016. the largest increase since last January and the 59^th consecutive month of year-over-year gains.

With the exception of an unusually harsh and wintry December, existing home sales have now strongly beat expectations in four out of the past five months, as buyers took advantage of slightly better weather and slightly lower mortgage interest rates in January. Demand for homes continues to outpace supply, with inventory falling year-over-year for the 20th straight month. It’s likely that a combination of tight inventory and low mortgage interest rates is pushing some buyers into the market early this year, both to capitalize on low mortgage interest rates while they can and to get a jump on the competition to come in the busy spring home shopping season. Buyers in search of good bargains and/or potentially denser and more urban locations are favoring condominiums over single-family homes, especially in the pricier Western U.S., where condo sales were up a whopping 14.3 percent month-over-month. Overall, this is an exceptionally strong way to start the year, and it’s clear that demand is likely to continue to be very high as the market enters the spring, even if inventory remains low and affordability suffers somewhat from rising mortgage interest rates.