U.S. Home Sales Hit 10-year High, Prices Soar

U.S. home resales surged to a 10-year high in January as buyers shrugged off higher prices and mortgage rates, signaling rising confidence in the economy and bolstering expectations of a pickup in growth in the first quarter.

Existing home sales jumped 3.3 percent to a seasonally adjusted annual rate of 5.69 million units last month, the highest level since February 2007, the NAR said.

Though the nation's housing inventory increased from December, it remained near a record low. As a result, the median house price vaulted 7.1 percent from a year ago to $228,900 in January. That was the biggest increase since January 2016.

But a persistent shortage of properties available for sale, which is lifting house prices, remains an obstacle to a robust housing market. That is likely to put pressure on homebuilders to ramp up construction.

Last month, the number of homes on the market rose 2.4 percent to 1.69 million units, still remaining close to an all-time low of 1.65 million units in December. Housing inventory was down 7.1 percent from a year ago. It has declined for 20 straight months on a year-on-year basis.

At January's sales pace, it would take 3.6 months to clear the stock of houses on the market, unchanged from December. A six-month supply is viewed as a healthy balance between supply and demand.

With fewer homes available for sale, house prices maintained their ascent last month, recording their 59th consecutive month of year-on-year gains. The higher prices are increasing equity for homeowners and might encourage some to put their homes on the market, but could sideline first-time buyers from the market. First-time buyers accounted for 33 percent of transactions last month, well below the 40 percent share that economists and realtors say is needed for a robust housing market. That was up from 32 percent in December and a year ago.