Existing-home sales inched upward in January while raw unsold inventory dropped to the lowest level seen in 13 years, according to data released today by the National Association of Realtors. Existing-home sales were up 0.4% from December’s downwardly revised number to a seasonally adjusted annual rate of 4.92 million units. Year over year, sales improved 9.1%. 

“Buyer traffic is 40% above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly,” said Lawrence Yun, NAR’s chief economist, in a release. “We’ve transitioned into a seller’s market in much of the country.” 

Indeed, total housing inventory was down by 4.9% for the month to 1.74 million units, a 4.2-month supply at the current pace. Single-family inventory fell to 1.55 million units, the lowest level seen since January 1995. 

“Inventories are lean and dropping because builders are not building enough homes,” said Patrick Newport and Stephanie Karol, economists at IHS Global Insight, in a joint statement discussing the numbers. “That is why home prices are rising in most markets today. Higher home prices, in turn, are bringing more builders into the game, lifting homeowners above water, raising household wealth and boosting state and local tax revenues. In other words, they are setting the stage for a pickup in growth.”

The median price across all housing types moved up 12.3% from the previous year to $173,600, and sales improved in all regions except the West, a discrepancy NAR attributed to insufficient supply. “Given that the average price in the West rose by more than 26.9% from a year earlier, this explanation makes sense,” Newport and Karol said.

See NAR’s full release on January’s existing-home sales.

Claire Easley is a senior editor at Builder.