Home prices and home sales both surged in January amid record-low inventory levels. While you might expect those sales to be from first-time homebuyers looking for their starter homes and bidding against other buyers in the same boat, you might be surprised to learn that more of those buyers were investors.

According to the National Association of Realtors (NAR), home prices were up 15.4 percent in January on a year-over-year basis. Meanwhile, the nationwide median home price in January hit $350,300, a new high for the month. The total number of homes sold? 6.5 million (seasonally adjusted). While this is actually a decrease from January 2021, it marked a 6.7 percent increase from December sales. So, why the spike when mortgage rates are increasing? Lawrence Yun, chief economist at NAR says, “Buyers were likely anticipating further rate increases and locking-in at the low rates, and investors added to overall demand with all-cash offers.”

NAR also remarked on the number of first-time homebuyers being near all-time lows. A year ago, 33 percent of sales were to those first-time buyers, but January 2021 saw only 27 percent of sales to buyers taking their first stab at the marketplace. Investors and second-time buyers made up a whopping 22 percent of sales in January, which was up 15 percent from the year prior. The cash sales Yun mentioned? Well, all-cash sales made up 27 percent of transactions in January, which was up from a total of 23 percent in December. Those cash offers would allow investors to surpass the ever-increasing mortgage rates, which are steadily rising.

Homebuyers have steep competition with those investors as it looks like both are after single-families and condos. Single-family home sales increased by an annual rate of 5.76 million (seasonally adjusted), a 6.5 percent increase from December. These sales also saw an increase in price of 15.9 percent from last January. Existing condo and co-op sales saw an increase of 8.8 percent in their seasonally adjusted annual rate (from December) and an annual price increase of 10.8 percent.

There’s no sign of demand slowing down either, despite low inventory, rising rates, and continually high prices.

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