Facing strong headwinds from low and contracting for-sale inventory, existing home sales have plateaued over the past year at around three-quarters of the highs reached at the peak of the last housing cycle.
Existing home sales were volatile at the end of 2017 – rising sharply above expectations in November before falling sharply below expectations in December. In January, we expect existing home sales posted a modest rebound, rising 0.9 percent from December to 5.62 million units at a seasonally adjusted annual rate (SAAR). This would put existing home sales 1.2 percent below their January 2017 level.
Facing strong headwinds from low and contracting for-sale inventory, existing home sales have plateaued over the past year at around three-quarters of the highs reached at the peak of the last housing cycle. They’re about 1.5 million units (SAAR) below that mid-2005 peak. Although winter storms across much of the Northeast and upper Midwest early in January also slowed some activity, they occurred early enough in the month that closings caught up later in the month.
The National Association of Realtors (NAR) will report existing home sales on Wednesday, February 21.
We expect new home sales – which the U.S. Census Bureau will report on Monday, February 26 – to increase 0.4 percent for January to 627,000 units (SAAR) after a disappointing December. New home sales also have been volatile over the past few months but trended haltingly upward.
