Existing home sales rose to their second highest tally of the recovery in January with a 0.4 percent increase to an annual 5.47 million rate, according to the National Association of Realtors.
This beat the expected pace of 5.30 million and was also an 11 percent increase year-over-year. The tight supply is pushing the median home price up (median price is up 8.2 percent from January 2015) affecting affordability, but the increased value of homes is helping to entice sellers to list their homes for sale, thus adding to the supply.
Despite the tight supply and the increase in asking prices, demand has not dropped off, due in large part to a robust job market and low interest rates, reports MarketWatch. While it may be good for sellers to have so much pricing power, it might not be good for the rest of the economy.