According to the National Association of Realtors (NAR) total existing home sales in the United States dropped to 257,000 in January 2009, representing a 7.6% decline compared to January 2008. This national aggregate number though misrepresents what happened across the country’s various regions as there was a significant geographic variation in the dynamics of home sales. In particular, home sales in the West increased strongly by 32% from January 2008, reaching 74,000, at a time that home sales in the other three regions declined by more than 15%. With total home sales dropping to 35,000, the Northeast was the hardest hit region in January 2009, with a decline of 22% compared to January 2008. The annual decline in home sales in the Midwest and the South in January 2009 was 16.1% and 16.9%, respectively, bringing total home sales down to 52,000 and 96,000, respectively.
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Housing Sales Prices
According to NAR average housing sales prices declined in January 2009 in all regions but with some significant geographic variation. Average housing prices at the national level declined by 13.3% from their January 2008 levels. The region hit the hardest by far was the West where average housing prices in January 2009 declined by 21.9% on an annual basis. The decline at the second hardest hit region, Northeast, was about 10 percentage points smaller, as it stood at 11.6% in comparison with January 2008 average housing prices. Midwest and South were the least affected regions with annual declines of 7.2% and 8.3%, respectively. The significantly greater drop in average housing prices in the West was most likely the reason for the significant increase in home sales in that region in January 2009, at a time that home sales declined considerably in all other US regions.
Mortgages and Mortgage Rates
According to the Mortgage Bankers Association’s weekly survey, mortgage applications last week fell 15 percent on a seasonally adjusted basis, as a result of a slight increase in mortgage rates. Similarly, the share of refinancing to total mortgage activity fell from 74.2 percent the previous week to 69.7 percent last week. According to the Mortgage Bankers Association, mortgage rates were up slightly, as the 30-year fixed-rate increased to 5.07 from 4.99 percent and the 15-year fixed-rate to 4.71 from 4.66 percent.
Return from Housing Market January 2009 to Market Watch
