If you saw headlines that talked about how “home sales fell sharply in January,” it probably raised an eyebrow – especially if you’re thinking about selling your house. But context matters.
Yes, in January, home sales declined. But that has more to do with seasonality and the weather than it does with any big drop off in demand.
What’s Really Behind the Decline?
Reports coming out of the National Association of Realtors (NAR) say the pace of home sales fell roughly 8.4% last month compared to the month before. And that’s true. But it isn’t necessarily cause for alarm.
Data show it’s normal for sales to dip in January. In the last 4 years, that pattern has held true all but once. And sure, the decline we saw this year was a steeper drop off than the norm (the yellow bars on the right), but that can be explained too. More on that in a moment.
The really important part you’re not going to get from the headlines is this: typically speaking, the pace of home sales picks back up in February as the spring market starts to take off. That’s shown in the green bars below.
So even though the market slowed a bit momentarily, it should start to pick back up.
And just in case you’re wondering, why the bigger drop this year, especially with mortgage rates being lower than last year? Here’s your answer. As Realtor.com explains:
“Winter storm Fern, which dumped snow and ice across large swaths of the (click "Learn More" to finish the article)...
