Sales of existing U.S. homes dropped in January, according to the National Association of Realtors, a product of both seasonal and unique market factors.
Total sales fell 4.9 percent to a seasonally adjusted annual rate of 4.82 million in January, down from December’s 5.07 million. Even though sales decreased to their lowest rate in nine month, they were still 3.2 percent higher than the previous year.
“January housing data can be volatile because of seasonal influences, but low housing supply and the ongoing rise in home prices above the pace of inflation appeared to slow sales despite interest rates remaining near historic lows,” said NAR chief economist Lawrence Yun. “Realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
The median existing-home price rose to a national average of $199,600, a 6.2 percent increase from January 2014 and the 35th straight month over year-over-year price gains.
Meanwhile, total inventory of existing-homes edged up 0.5 percent from December to 1.87 million available properties, but it remains 0.5 percent below the year-ago level. At the current sales pace, there is a 4.-7-month supply of homes on the market.
And mortgage interest rates fell during January, with Freddie Mac reporting that the monthly average on a 30-year fixed rate mortgage slipped to 3.67 percent, a 20-month low, down from 3.86 percent in December.
“Although sales cooled in January, home prices continued solid year-over-year growth,” Yun commented. “The labor market and economy are markedly improved compared to a year ago, which supports stronger buyer demand. The big test for housing will be the impact on affordability once rates rise.”