Home Sales in January Jump Nearly 7 Percent, Economy Slows. 4 Key Things to Know
A February article published in The Balance, a website that centers on personal finance, reported that home sales in January rose sharply even as the U.S. economy slowed down. Here are four highlights to know.
January’s Home Sales Increase Surprises Forecasters
Home sales rose 6.7 percent in January—a sharp increase from a 3.8 percent decline the previous month, and the highest annualized sales pace in a year. The rise came at the surprise of market forecasters who had anticipated a decline, according to the National Association of Realtors.
January Saw the Lowest Home Inventory in Decades
Amid persistently-low home inventory and high demand, buyers snatched-up available homes–shrinking the number of properties for sale to just 860,000 at the end of January, the report noted. That’s the lowest for any month since at least 1999.
Home Prices and Interest Rates Rise
With home prices continuing to rise rapidly, there’s no foreseeable relief in sight for buyers. That, along with rising interest rates, is making homeownership less affordable overall. The January jump in home sales could be indicative of buyers rushing to get home loans before another hike in interest rates.
Economic Activity Declined in January. Here’s Why.
In January the U.S. economy decreased by 0.3 percent based on the Conference Board Leading Economic Index, which is a measurement tool that’s designed to indicate the direction of economic activity. That’s the first decline since February 2021. Economists had expected the Board index to increase by 0.2 percent.
A critical factor in the decline was the uncertainty caused by the spread of the Omicron COVID-19 variant, which resulted in declines in stocks, employment, and manufacturing in January. The economy could begin to rebound, however, as the infection threat subsides, according to Moody’s Analytics.