Home sales unexpectedly increased in January, but investors paying in cash are squeezing out first-time buyers from a housing market facing record-low inventory and rising prices.
The surge in U.S. sales of previously owned homes last month reported by the National Association of Realtors on Friday also reflected buyers rushing in to close contracts in anticipation of mortgage rates rising.
Investors, though, made up the largest share of transactions in six years last month. First-time buyers accounted for just 27% of sales last month, compared to 33% a year ago.
Mortgage rates have climbed to levels not seen since 2019 as the Federal Reserve is expected to start increasing interest rates next month to tame soaring inflation. Economists are anticipating as many as seven rate hikes this year.
“This is the rush to get in before borrowing costs move higher,”…