Demand destruction continues after the price explosion from mid-2020 to mid-2022.
By Wolf Richter for WOLF STREET.
Sales of single-family homes that closed in January plunged seasonally adjusted by 9.0% from December, to an annual rate of 3.53 million sales. Compared to January in:
- 2025: -4.3%
- 2024: -9.5%
- 2023: -3.3%
- 2022: -37.2%
- 2021: -40.2%
- 2019: -20.1%
There were bad winter storms in parts of the country. So, OK. But wait… in the vast West, the weather was warm and fairly dry for this time of the year, and sales in the West plunged too; more in a moment (historical data from YCharts):
But supply of single-family homes surged to 3.8 months in January (big red square in the chart below), the highest for January since 2019, which was also 3.8 months, and both were the highest since 2016 (4.0 months).
A year ago, supply was 3.5 months, two years ago, it was 3.0 months (historical data from YCharts).
The national median price of single-family homes fell by 2.2% in January from December to $400,300. Year-over-year, the median price edged up by 0.6%.
This national median price of single-family homes had exploded by 41% in the two years from June 2020 through June 2022. Those too-high prices – what NAR calls “affordability issues”) are now causing the demand destruction.
The median price is very seasonal, rising and falling with the shift in inventories and sales, as a larger share of more expensive homes come on the market and sell in the spring, thereby changing the mix of what sold, and shifting the median price up through June. In the second half of the year, the mix reverts, and the median price drops and usually bottoms out in January or February. This happens every year.
The index is not seasonally adjusted. The seasonal zigzag is a result of these shifts in the mix of what is on the market and sells, which shifts the median price up or down.
Sales of condos and co-ops fell seasonally adjusted by 2.6% from December, by 5.0% year-over-year, by 49% from January 2021, and by 32% from January 2019, to an annual rate of 380,000 sales, according to the National Association of Realtors today.
Actual condo sales, not the annual rate, fell to just 21,000 condos.
NAR’s condo sales data go back to only 2011, and within that time frame, sales have been wobbling along record lows for the fourth year now.
Supply of condos suddenly plunged from one month to the next, to 3.6 month in January from 5.0 months in December (big red square in the chart below). There is usually either no decline or a small decline from December to January, and that kind of drop is an outlier. And this being January, a squirrely month for real estate, I don’t expect this to last. I suspect a data issue that either a revision will undo, or that will bounce back in February.
Demand destruction by region.
The charts below show the seasonally adjusted annual rate of sales (SAAR) in the four Census Regions of the US. A map of the four regions is at the top of the comments below.
In the West, where the weather was historically warm for this time of the year, the seasonally adjusted annual rate of sales plunged by 10.3% in January from December, to 700,000 homes.
Compared to January in:
- 2025: -7.8%
- 2024: -5.4%
- 2023: -1.4%
- 2022: -44.0%
- 2019: -28.6%
- 2018: -39.7%
In the South, the seasonally adjusted annual rate of sales plunged by 9.0% in January from December to 1.81 million homes.
Compared to January in:
- 2025: -1.6%
- 2024: -1.1%
- 2023: -3.2%
- 2022: -36.9%
- 2019: -15.0%
- 2018: -20.3%
In the Midwest, the seasonally adjusted annual rate of sales fell by 7.1% in January from December to 920,000 homes.
Compared to January in:
- 2025: -7.1%
- 2024: -3.2%
- 2023: -6.1%
- 2022: -36.1%
- 2019: -22.7%
- 2018: -30.8%
In the Northeast, the seasonally adjusted annual rate of sales fell by 5.9% in January from December to 480,000 homes.
Compared to January in:
- 2025: -4.0%
- 2024: -0%
- 2023: -5.9%
- 2022: -38.5%
- 2019: -29.4%
- 2018: -32.4%
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the mug to find out how:
If I recall correctly, the map for West is a pretty large chunck….unfortunately SoCal, especially in hot areas like certain part of LA, OC and SD is not following the same west pattern. I wish it is but not holding my breath it will be the case anytime soon. So far, these markets have been able to defy gravity much more so than even NorCal….
Hey Wolf,
They certainly are not going down in the Florida Panhandle. Prices have been on an upward trajectory since 2021 when the Fed printed. And homes are selling briskly.