United States pre-owned home sales in biggest fall for three years

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Home sales are on the rise in Yuma county, contradicting the national dip that the real estate industry is experiencing according to The Yuma Association of Realtors.

The Ohio Association of Realtors said Wednesday that sales of new and previously owned homes declined from December and were down 3.3 percent from January of 2017. What's more, it was largest decline on an annual basis since August 2014. Existing-home sales saw a 3.2 decrease in January, hitting a seasonally adjusted annual rate of 5.38 million. "As a result, existing home sales accounted for 26.1 percent of inventory sold, staying above 2005's peak rate of inventory sold". This marks the 71st straight month of year-over-year gains. A separate report on January sales of new homes is due out Monday.

A six-to-seven-month supply is viewed as a healthy balance between supply and demand. The dollar strengthened against a basket of currencies as yields on shorter-dated U.S. Treasuries rose.

Total housing inventory at the end of January rose 4.1 percent to 1.52 million existing homes available for sale but is still 9.5 percent lower than a year ago. It was up from 4.32 percent in the prior week. While rates are still low compared to historic norms, if the rate increases scared away some would-be buyers by denting affordability, that does not bode well for the rest of the year in which rates are only expected to go up.

Mortgage rates are increasing in tandem with US government bond yields on worries about rising inflation.

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"The gradual uptick in wages over the last few months is a promising development for the housing market, but there's risk these income gains could be offset by the recent jump in mortgage rates", Yun said. With properties scarce and prices rising, sellers still have the upper hand.

As has been the case for more than a year now, the main culprit is lack of supply. Unsold inventory is at a 3.4-month supply at the current sales pace, as against 3.6 months a year ago.

But housing supply could improve in the coming months as government data last week showed the number of homes under construction surged to near a 10-1/2-year high in January.

Lawrence Yun, NAR chief economist, says January's retreat in closings highlights the housing market's glaring inventory shortage to start 2018.