The title may be somewhat alarming, but this can mean a variety of things. Let’s analyze the trends and reports so we can get a better sense of what this means. This data is courtesy of MarketWatch.
From the National Association of Realtors, existing-home sales ran at a 4.94 million seasonally-adjusted annual rate in January. Sales of previously-owned homes were even lower – by 1.2% – than the 3-year low they hit in December. They were 8.5% lower than a year ago.
The first thing to look at is the metric being measured. This report is taking a monthly report for the month of January. January has the lowest amount of activity for any month of the year in real estate. While it’s a bit alarming, we must stay tuned for the upcoming months to decide if this is a trend in 2019 and beyond.
Also from the report, first-time buyers haven’t made any progress, and even took a step back in January, making up 29% of all transactions during the month, well below their long-term average 40% share.
This should not be alarming for the month of January. The most likely buyers in the month of January will be those that are not first-time home buyers. How many first-time home buyers do you know that want to go through the cold weather after the holidays to find a home? First-time home buying picks up as the year goes on.
Existing homes are declining in sales across the country, but we believe that fact is not yet a trend. This bears watching in the coming months.