Home Prices Continue to Jump as Inventory Falls to Record Low
February 17, 2022
Home prices climbed in January as buyers competed over a record-low number of homes, eager to purchase before mortgage rates climb higher.
The median price for a home last month was $350,300, up 15.4% from a year ago, according to the National Association of Realtors (NAR). While that is not the highest median price on record, which was $362,800 last June, it is the highest for the month of January, which tends to be a quieter month in the housing market.
Sales of existing homes jumped 6.7% from the month before but were 2.3% lower than in the same month last year, due primarily to much lower inventory.
At the end of January, there were just 860,000 homes available to buy, down 16.5% from last year. That is the lowest since the NAR started tracking data in 1999. At the current sales pace, supply would last just 1.6 months, also an all-time low.
Inventory is most constrained at the lower end of the market, homes priced below $500,000, which has led to fewer first-time buyers.
Just 27% of homes sold in January were purchased by first-time buyers, nearly an all-time low down from 33% a year prior. At the same time, the share of homes purchased by investors or second-home buyers jumped to 22%, up from 15% a year ago.