Resales of homes and condos in the US spiked lower in January, to a fresh 12-year low, following a jump in sales in December. The US housing market as a whole digressed slightly during the first month of the year, even as both inventories and mortgage rates plunged. Sales fell 5.3% in January, from a seasonally-adjusted annualized rate of 4.74 million in December to 4.49 million. The number was below expectations, as economists estimated sales at a rate of 4.80 million. Resales of US homes have fallen 8.6% in the past year.

The good news: Inventories of unsold homes fell for the month, despite a slower sales pace. Inventories were down 2.7% to 3.60 million units for sale, a two-year low. That represents a 9.6-month supply, well below the 11.2-month supply in November.

The median sales price fell to $170,300 in January, down 14.8% compared with a year earlier. Although this might not be a positive in the short-term, this has to occur. The faster prices fall, the faster inventories are cleared out and the quicker prices would stabilize.

Sharp declines in mortgage rates in the past few months probably didn’t have any affect in today’s report, according to the National Association of Realtor’s chief economist, Lawrence Yun. So the increased demand due to the significant decrease in the cost of borrowing has yet to be felt.

NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared to conditions before the stimulus package. Inventory is expected to fall below an 8-month supply by the year end, which would be consistent with home price stabilization.

The bad: 45% of existing home sales were foreclosures.

The median sales price fell to $170,300 in January, down 14.8% compared with a year earlier. That is a six year low. Despite its benefits in the long run, pain is still pain, and it hurts a whole lot.

Sales of single-family homes dropped 4.7%, while sales of condos fell 10.2%. Sales of single-family homes are down 7.1% in the past year, while sales of condos are down 20.3%.

Via Realtor.org:

Regionally, existing-home sales in the Northeast dropped 14.7 percent to an annual pace of 640,000 in January, and are 23.8 percent lower than January 2008. The median price in the Northeast was $228,200, down 14.7 percent from a year ago.

Existing-home sales in the Midwest fell 5.7 percent in January to a level of 1.00 million and are 16.7 percent below a year ago. The median price in the Midwest was $138,100, which is 6.8 percent lower than January 2008.

In the South, existing-home sales declined 5.7 percent to an annual pace of 1.64 million in January, and are 15.9 percent below January 2008. The median price in the South was $152,100, down 7.4 percent from a year earlier.

Existing-home sales in the West were unchanged at an annual rate of 1.20 million in January and are 29.0 percent stronger than a year ago. The median price in the West was $220,000, which is 25.5 percent below January 2008.

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