U.S. Existing Home Sales Pull Back Sharply In January

(RTTNews) - Existing home sales pulled back sharply in the month of January, according to a report released by the National Association of Realtors on Friday.

NAR said existing home sales plunged by 4.9 percent to an annual rate of 4.08 million in January after surging by 2.9 percent to an upwardly revised rate of 4.29 million in December.

Economists had expected existing home sales to tumble by 2.8 percent to an annual rate of 4.12 million from the 4.24 million originally reported for the previous month.

The steeper than expected drop came a month after existing home sales jumped to their highest annual rate since reaching 4.31 million last February.

"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve," said NAR Chief Economist Lawrence Yun. "When combined with elevated home prices, housing affordability remains a major challenge."

The report said housing inventory at the end of January totaled 1.18 million units, up 3.5 percent from 1.14 million in December and up 16.8 percent from 1.01 million a year ago.

The unsold inventory represents 3.5 months of supply at the current sales pace, up from 3.2 months in December and 3.0 months in January 2024.

"More housing supply allows strongly qualified buyers to enter the market," Yun said. "But for many consumers, both increased inventory and lower mortgage rates are necessary for them to purchase a different home or become first-time homeowners."

NAR also said the median existing home price was $396,900 in January, down 1.7 percent from $403,700 in December but up 4.8 percent from $378,600 in the same month last year.

Next Wednesday, the Commerce Department is scheduled to release its report on new home sales in the month of January.

Economists currently expect new home sales to pull back by 1.2 percent to an annual rate of 690,000 in January after jumping by 3.6 percent to an annual rate of 698,000 in December.