US Existing Home Sales Drop 4.9% Amid Rising Prices, Inventory Challenges

In January, existing-home sales in the U.S. fell nearly 5% from December, highlighting ongoing challenges in the housing market due to elevated home prices and stagnant mortgage rates. The National Association of Realtors reported that the median existing-home price rose to $396,900, a 4.8% increase from the previous year, making affordability a significant issue for many prospective buyers. While total inventory of unsold homes increased to 1.18 million units, representing a 3.5-month supply, the market is still seeing a substantial gap between homeowners and renters, with homeownership offering a net worth advantage of $415,000 versus $10,000. In the Greater Toronto Area, new home sales remained low as well, with only 347 units sold in January, down 40% year-over-year, although lower prices and steady inventory conditions may create opportunities for buyers. Despite a slight uptick in inventory, the market is characterized by a lack of demand amidst high prices, indicating a buyer's market. As the housing landscape evolves, first-time buyers are increasingly squeezed out, comprising only 28% of sales in January, down from 31% in December.