Existing Home Sales Stable as Inventory Shortage Boosts Home Prices

Updated July 2026

Existing home sales kept climbing in January 2013, according to the National Association of Realtors (NAR). But there just weren’t enough houses on the market to keep pace with buyers. The median sales price rose to $174,100, up 12.6% from a year earlier, which tells you demand hasn’t cooled even as choices for buyers have narrowed.

Single-family sales ticked up 0.2% for the month, hitting a seasonally adjusted annual rate of 4.34 million units, compared to 4.33 million in December. That’s an 8.5% jump over the 4 million pace from January 2012. Growth is real, but it’s a ceiling, not a floor: low inventory keeps capping how much higher sales volume can go, and it’s shaping prices and buyer behavior in nearly every region.

Sellers, though, aren’t budging. Buyer traffic jumped 40% versus the same stretch in 2012, per NAR, yet listings barely moved. That mismatch is exactly what’s pushing prices up and turning ordinary home shopping into a scramble.

Why Is Inventory So Low in 2013?

Total housing inventory stood at 2.38 million existing homes at the close of December 2011, per the National Association of Realtors. Fast forward to January 2013, and that number had fallen to 1.74 million, a 4.9% drop from December 2012 and the thinnest supply in nearly 13 years. What was a 6.2-month supply back in 2011 has been squeezed down to just 4.2 months.

That earlier figure, 2.38 million homes, was already below prior peaks. The additional slide since then points to something more structural than seasonal. The Federal Reserve Bank of San Francisco has linked it to post-recession dynamics, elevated mortgage delinquencies and tighter lending rules from the CFPB, both of which have made homeowners reluctant to list.

A lot of that reluctance traces back to underwater mortgages, where what’s owed exceeds what the house is worth. Selling under those terms means losing money, so people just don’t. Supply stays flat even as demand climbs, particularly from first-time buyers leaning on Fannie Mae and Freddie Mac programs to get in the door.

Underwriting standards, meanwhile, haven’t loosened since 2008. Chase, Bank of America, and SoFi all want higher FICO scores, lower DTI ratios, and bigger down payments than they did before the crash. That shrinks the buyer pool, sure, but it also keeps homeowners who can’t refinance from putting their houses up for sale in the first place.

Say your FICO score sits at 620 and you need a $220,000 loan with 20% down. Chase or Bank of America will likely turn you down. Both lenders tend to want scores above 660 and DTIs under 36% these days. Fall in that 620 to 659 range and conventional financing is mostly off the table, no matter what you can actually afford. That’s part of why only 43% of sales involved multiple offers this time around: fewer qualified buyers chasing a shrinking supply, even with prices climbing. It’s worth adding, though, that NAR’s inventory figures are self-reported through MLS data and don’t capture off-market or pocket listings, so the real shortage may be somewhat overstated or understated depending on the region.

How Is Low Inventory Affecting Prices and Bidding Wars?

A 4.2-month supply puts most of the country squarely in seller’s-market territory. That imbalance is what’s pushing prices higher. The median sales price for existing homes hit $174,100 in January 2013, up 12.6% from a year prior. Sacramento and Dallas, among other high-demand spots, outpaced the national average by a wide margin.

States with strong job growth are seeing the sharpest gains. California prices climbed 15% year-over-year; Texas came in at 13%. Remote workers and tech professionals are driving a lot of that demand, many comparing APR rates through LendingTree or Bankrate before they even submit an application.

Bidding wars have become routine. Multiple-offer situations accounted for 43% of January sales, per NAR, up from 37% in December. Sellers in tight markets, especially New York City and Seattle, are routinely fielding offers well above asking.

Regional Differences in Sales Trends

National numbers ticked up modestly, but the regional picture varied a lot more. The South posted a 0.5% sales increase in January and the Midwest rose 0.7%, both regions helped along by decent job markets and housing that’s still relatively affordable.

California sales rose 1.2%. Texas came in at 0.9%. The West overall, a category that includes Oregon, Washington, and Colorado, actually slipped 0.4%, a decline that traces back to steeper prices and tighter lending limits along the coast.

Even in the fastest-growing markets, inventory stays thin. Colorado’s median home price hit $295,000, up 16% from 2012, while supply fell to just 3.8 months. Oregon’s supply dropped to 4.1 months, down from 5.2 the year before.

What’s the Impact of Distressed Sales?

Foreclosures and short sales, distressed sales in industry terms, have fallen off sharply since 2012. They made up 35% of all existing home sales in January that year. By December 2012 that share had dropped to 24%. January 2013 brought it down further, to 23%.

Part of that comes down to better borrower credit and shorter foreclosure timelines. The Federal Reserve has pushed lenders to speed up workouts and cut down on foreclosures generally. Fannie Mae and Freddie Mac now offer modifications that let more homeowners avoid default altogether.

The result: distressed sales are edging back toward pre-recession norms. Back in 2005, they were roughly 20% of the market. Sitting at 23% now suggests the market’s healing, even if it’s not all the way there yet.

How Long Does It Take to Sell a Home?

Median days on market fell to 71 in January 2013, down from 73 in December. Compare that to 99 days in January 2012 and the shift becomes obvious.

Part of that speed comes from buyer urgency, part from smarter pricing. Homes priced at or just under market value move fastest. In Miami and San Antonio, listings with updated kitchens and energy-efficient upgrades were selling in under 45 days.

Homes with old systems or deferred maintenance sit longer, no surprise there. NAR data shows agent-listed homes sell 27% faster than those sold without representation.

Market Outlook for 2013

Inventory isn’t expected to rebound much in 2013, according to NAR. Spring typically brings a wave of new listings, but that seasonal bump won’t fix a shortage this deep.

Expect prices to keep rising in the hottest markets. New York’s median price was up 14% over the prior twelve months. Boston posted a 12% gain. Both trends should hold through the year, particularly in cities where there’s simply no more land to build on.

Job growth is the wildcard. The Bureau of Labor Statistics put 2012 employment growth under 2%, and it slowed further in the fourth quarter. Weak hiring could stall demand, especially outside the big metro areas.

Frequently Asked Questions

What was the existing home sales rate in January 2013?

Existing home sales reached a seasonally adjusted annual rate of 4.34 million, up 8.5% from January 2012, according to the National Association of Realtors.

How low is housing inventory in 2013 compared to 2011?

Housing inventory dropped to a 4.2-month supply in January 2013, down from a 6.2-month supply at the end of December 2011, per NAR 2011 data.

Why are home prices rising despite low sales volume?

Prices are rising due to strong demand and limited supply. With only a 4.2-month supply of homes, buyers compete for available listings, driving up prices, especially in high-demand cities like Dallas and Sacramento.

What percentage of home sales were distressed in January 2013?

Distressed sales, foreclosures and short sales, accounted for 23% of all existing home sales in January 2013, down from 35% in January 2012.

How long does it take to sell a home now?

The median time to sell is 71 days in January 2013, down from 73 in December and 99 in January 2012, according to NAR.

Which regions had the highest sales growth in January 2013?

The South and Midwest saw the strongest increases, with the South up 0.5% and the Midwest up 0.7%. The West region saw a slight decline.

Are mortgage lenders making it harder to buy a home?

Yes. Lenders like Chase, Bank of America, and SoFi now require higher FICO Scores and lower DTI ratios, tightening credit access.

Why aren’t more people selling their homes?

Many homeowners are underwater on their mortgages and can’t afford to sell without losing money. Others are waiting for better market conditions. The Federal Reserve Bank of San Francisco notes this creates a “lock-in effect.”

What role does the CFPB play in housing markets?

The CFPB oversees lending standards and consumer protections. It encourages lenders to offer loan modifications, helping homeowners avoid foreclosure and reducing distressed sales.

Will home prices keep rising in 2013?

Yes, especially in high-demand cities. With supply remaining low, prices are likely to continue rising, though growth may slow if job growth remains weak.