Home Sales are on the Rise in January

In the Capital Region, pending sales increased 6.4 percent from January 2019 to 844 for the month. Closed sales increased 9 percent from January 2019 to 809 for the month; a nice surprise for what is usually the slowest month of the year.

According to Freddie Mac, the low mortgage rate environment continues to spur home buying activity, with applications to purchase a home up fifteen percent from a year ago. Nationally, we’ve seen new residential construction surge over the last few months, on pace to reach the highest level in more than a decade. This is a good sign for the inventory-starved housing market and is a promising indication for the spring homebuying season.

Inventory levels are still down market-wide however. Months’ supply of homes fell by 19.2 percent to 4.2 months impacting the inventory of homes for sale to decline by nearly 20 percent to 4,565 homes. Changing that narrative has proven to be a challenge in recent years.

Greater Capital Association of REALTORS® President, Tom McGroder, Thomas J Real Estate, said new construction is part of the solution for a market facing inventory concerns. “More sellers need to enter the market or more homes need to be built, it’s as simple as that,” McGroder said.

As a result of the decreased inventory, prices were up compared to this time last year. The median sales price increased 2.5 percent to $205,000. Price increases are expected again this year, but buyers are not expected to blindly pay prices that put their ability to live a healthy financial life in jeopardy.

Home affordability will continue to set the tone for the 2020 housing market. The housing affordability index increased 6.9 percent. This indicates that homebuyers are able to afford the rising home prices.