January Home Sales Drop Sharply for Second Straight Month

By Mark Lieberman

Managing Director and Senior Economist


  • The pace of existing home sales – closed sales — FELL sharply in January: down 3.2 percent to a seasonally adjusted annual sales rate of 5.38 million after a 2.8 percent drop in December
  • The December sales rate was REVISED DOWN 10,000 to 5.56 million;
  • Median price of an existing single-family home DIPPED 6.4 percent or $6,000 – the steepest one-month decline in two years;
  • Year-year the median price is up 5.8 percent or $13,200;
  • Number of homes available for sale ROSE 60,000 or 4.1 percent to 1.52 million;
  • The months’ supply of homes for sale in January ROSE to 3.4 – the first increase since last May


  • Over the last two months, sales of existing single-family homes have dropped almost six percent, the largest two0-month decline since October-November 2015 when sales fell 10.7 percent;
  • The year-year decline in sales — 5.4 percent – was the largest since August 2014 when the 12-month decline was 7.2 percent;
  • The sales drop came even though the Pending Home Sales Index – measuring contracts for sale – was up for the second straight month;
  • The median price of an existing home has fallen month-month for six of the last seven months; the January price drop was the largest one-month price decline since September 2015;
  • The increase in the number of homes for sale ended a string of seven straight monthly DECLINES.

Data Source: National Association of Realtors: (NAR):

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The new tax code was expected to have an impact on homeownership and the January report on home sales (closings) suggests those concerns may have been realized sooner. That said, the inventory of homes on the market increased which could boost future sales but that increase in homes for sale could also be from homeowners who see the benefits of owning a home fading.

To be sure, one month – or in this case two months — may not signify a trend but it sure looks as if builder Donald Trump may have been a bit short-sighted.

Buyer traffic, according to the NAR improved in January but that may not have been because of interest in actually buying. Realtors know that the Sunday after Thanksgiving is a strong day for open houses. After being cooped up with football and turkey and relatives, “window-shopping” for a new home may be just the cure for home-bound boredom. The same goes for cold weather which keeps people in their apartments or homes.

Indeed, we won’t know for a while just how much of an impact the limit on home mortgage interest will have on transactions, but the advance report certainly isn’t favorable.

Hear Mark Lieberman every Friday, on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

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