US residential property market begins to cool

on Feb 27, 2015

The National Association of Realtors (NAR) this week released its latest statistics on sales in the US residential property market. The figures revealed that although January sales volumes were lower than they had been for nine months, they were still higher than the same month in 2013. The release also showed that all regions in the US experienced a decline in sales in January.

The total number of transactions completed in January amounted to 4.82 million, a decline from the 5.07 million in December, and the lowest level since April but still 3.2 percent higher than January 2014
Lawrence Yun, NAR chief economist, said that the housing market got off to a somewhat disappointing start with January closings down throughout the country.
“January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” he explained.

“Real estate agents are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions,” he added.
The total number of houses for sale during January was 1.87 million, down 0.5 percent from the same month in 2014. The average house price in the month was $199,600, a significant increase of 6.2 percent from a year earlier. According to US mortgage lender Freddie Mac, mortgage rates were at 3.67 percent in January, their lowest point since May 2013 when they were at 3.54 percent.
“Although sales cooled in January, home prices continued solid year on year growth. The labour market and economy are markedly improved compared to a year ago, which supports stronger buyer demand. The big test for housing will be the impact on affordability once rates rise,” Yun commented.

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