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Americans buy existing homes at fastest pace in a decade

A house for sale, in Hialeah, Florida. Americans shrugged off higher mortgage rates and bought existing homes in January 2017 at the fastest pace since 2007, the National Association of Realtors reported Wednesday. In Northwest Indiana, sales were up 2.8 percent from a year ago.

Sales of existing single-family homes in Northwest Indiana showed a modest gain in January as compared to a year ago, growing 2.8 percent to 616, according to sales figures from the Greater Northwest Indiana Association of Realtors.

But that number reflects growth from a very strong January 2016, which had a 16 percent jump in sales.

"Last year we got off to a really good start," GNIAR CEO Peter Novak said. "The fact that we outpaced that shows January 2017 was a very good month."

The median sales price in the seven counties that make up GNIAR grew 6.2 percent to $147,628, continuing a trend of increasing prices.

"Demand is so high, inventory is so short, it's still a sellers' market," Novak said.

Nationally, January was the best sales month in nearly a decade. January sales of 5.69 million were only 100,000 off the February 2007 peak, according to the National Association of Realtors. The median price of $228,900 was up 7.1 percent from a year ago.

Sales in Lake County declined slightly, by 1.6 percent, to 358. The median selling price jumped 15.4 percent to $150,000.

Porter County saw sales growth of 7.3 percent to 133, and only a slight increase in the median price, to $180,000. LaPorte County rounded out GNIAR's three largest counties with sales growth of 4.3 percent to 73, and a median price decline of 16.3 percent to $119,500.

GNIAR also includes Jasper, Newton, Starke and Pulaski counties, which together accounted for 52 sales in January.

The National Association of Realtor's chief economist, Lawrence Yun, said January's growth in sales reflected the resiliency of a consumer base that faces a low inventory of homes for sale and worsening affordability conditions as prices rise.

"Much of the country saw robust sales activity last month as strong hiring and improved consumer confidence at the end of last year appear to have sparked considerable interest in buying a home," Yun said in Wednesday's announcement of January sales activity. 

Yun said he expects competition for low- and mid-priced homes to intensify in coming months, adding affordability pressures. 

The price increases have come in recent months with an uptick in mortgage rates, though the average 30-year, conventional fixed-rate mortgage rate fell slightly in January, to 4.15 percent, from 4.2 percent in December, according to Freddie Mac.

Novak said that without supply increases to absorb demand, affordability will become an issue at some point, but he said the relatively small increase in mortgage rates — they averaged 3.65 percent in 2016 — hasn't yet deterred people from buying a home they want.

On Wednesday, the NAR also reported:

• First-time buyers made up 33 percent of January closings, compared to 32 percent both last month and a year ago.

• Housing inventory — the number of homes for sale — rose 2.4 percent to 1.69 million in January. But available inventory is down 7.1 percent from a year ago and has fallen year-over-year for 20 straight months.

• Unsold inventory is at a 3.6-month supply at the current sales pace.

• Properties typically stayed on the market for 50 days in January, down from 52 days in December. Homes were typically on the market 64 days a year ago.

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Transportation Reporter

Andrew covers transportation, real estate, casinos and other topics for The Times business section. A Crown Point native, he joined The Times in 2014, and has more than 15 years experience as a reporter and editor at Region newspapers.