Just 1.42 million homes were on the market at the end of January, a 10.7% decline from a year ago. With fewer homes for sale, would-be buyers have fewer options and prices are rising faster than wage growth.
The median sales price in January was $266,300, up 6.8% from a year ago. Still, a solid economy and low mortgage rates are boosting demand for housing. Workers have an increased sense of security with the unemployment rate hovering near a half-century low at 3.6%. Meanwhile, the average interest rate charged on a 30-year mortgage was 3.49% this week, down from 4.35% a year ago, according to mortgage buyer Freddie Mac.