Following hard on the heels of the January new home sales report issued jointly by The Department of Housing and Urban Development and the Census Bureau (Department of Commerce), last week, the National Association of Realtors (NAR) has issued its report on existing home sales during the first month of 2006.

Like new homes, the sale of existing homes in January was off but to a lesser extent, down 2.8 percent to a seasonally adjusted annual rate of 6.56 units from a revised December figure of 6.75 million. The initial December report had estimated December sales at 6.60 million units. The January, 2006 figures were 5.2 percent lower than sales recorded during the same month in 2005.

At the end of the month there were 2.91 million existing homes including single family homes, condominiums, and townhouses, for sale in the U.S., a 5.3 month supply at the current absorption rate. At the end of December there were 2.80 million units available for purchase, a 5.1 month supply, so these January totals represent a 2.4 percent increase in inventory. At the end of 2004 there was a 3.9 month inventory available nationally.

Median home prices for all housing types was $211,000 in January, 11.6 percent higher than in January, 2005 when the figure was $189,000, and identical to the median price for the entire year of 2005. Single-family properties which dipped only 1.5 percent from December figures carried a median home price of $210,500, up 13.1 percent from January, 2005. The median single family home price was $209,300 in December, 2005. The report did not break out sales or price information for condos or townhouses.

NAR President Thomas M. Stevens said that the continued appreciation in home prices showed the long-term effects of tight housing supply. "Even when home sales slow, they still supply solid returns. The longer you own, the bigger the gain."

Echoing this, David Lereah, NAR's chief economist said that home sales were tracking the organization's leading indicator 'The Pending Home Sales Index' which he said had been trending down since its record high in August. "In the wake of interest rates peaking in November," he said, "I expect that we are in a bit of a trough that may be followed by a modest rise and then a general plateau in the level of sales activity. Existing-home sales should stay below the record levels experienced over the last two years, but they'll maintain a historically high pace."