The housing market seems stuck within a stasis. That’s to be expected given the winter months are usually the slowest in terms of housing sales and constructions, but considering we’re at 29-year lows, news from the National Association of Realtors (NAR) and the National Association of Home Builders (NAHB) as well as the monthly new residential construction report for January 2024 still shows an unseasonably frigid market.

While home sales rose in January 2024 compared to December 2023, it’s a light growth of 3.1% coming off of brutal lows and also a 1.4% decrease compared to prior year sales. As NAR Chief Economist Lawrence Yun puts it, many homebuyers were able to take advantage of lower interest rates compared to last year, though those lower rates are still on the rise compared to the previous month.

Another factor impacting the ice-cold market right now, housing prices, remains a growing issue as well, as the median existing-home sales price climbed another 5.1% YoY, marking the seventh consecutive month for yearly price gains.

While sky high mortgages rates are certainly impacting people’s ability to buy houses, it is equally impacting people’s willingness to sell. Most people who currently own a home have either paid it off or are locked into drastically lower rates, which massively de-incentivizes selling on their part while the rates are so high.

This lack of existing inventory places a greater emphasis on the construction of new inventory but looking at the monthly new residential construction report for January 2024, that seems to be on a decline as well.

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Looking at the bigger picture, overall housing starts had dropped 14.8% in January 2024.

Privately-owned housing starts came in at 1,331,000, 14.8% below December’s revised estimate and 0.7% below January 2023. Single family housing starts were also down 4.7% compared to December’s numbers, coming in at 1,004,000, though they are up 22% YoY.

Completions, too, dropped. Privately-owned housing completions sagged by 8.7% compared to December 2023, dropping to 1,416,000, though it is 2.8% above January 2023 estimates. Meanwhile, single family completions had dropped by 16.3% compared to December, down to 857,000.

Looking at things to come, privately-owned housing permits dropped 1.5% compared to December, down to 1,470,000. This is 8.6% above January 2023 numbers, though. Following that lighter note, single-family authorizations actually rose 1.6% above December’s numbers, amounting to 1,015,000 in January 2024.

The biggest losses in the housing market, however, are coming from the multifamily sector, with multifamily starts plummeting 35.6% YoY.

Alicia Huey, chairman of the National Association of Homebuilders (NAHB) notes that while lowering interest rates will ultimately benefit single-family construction leading into 2024, the current conditions are likely to contribute to a very slow start of the year, with NAHB Chief Economist Robert Dietz forecasting a massive decline in 2024, though this is coming off of the sector’s highest construction rates since 1973

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