US home sales unexpectedly surged in January, but investors paying in cash pushed out first-time buyers amid record-low inventory and higher prices.
Source: National Association of Realtors
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Existing home sales bounced back 6.7% to a seasonally adjusted annual pace of 6.50 million units last month. Sales increased in all four regions.
Home resales, which measure the bulk of the US home sales, dropped 2.3% on a year-on-year basis. Strong demand for housing against a rebounding labor market and huge savings is surpassing supply, hurting sales.
Builders have been unable to increase construction due to shortages and increased prices for inputs like softwood lumber for framing as well as cabinets, garage doors, countertops, and appliances.
Tight supply is maintaining house prices elevated. The average existing house price rose 15.4% from a year earlier to $350,300 in January. Sales remained concentrated in the upper price end of the market.
First-time buyers accounted for 27% of sales last month compared to 33% a year earlier. Individual investors bought 22% of homes in January, up from 15% a year earlier.