WASHINGTON—Sales of previously owned U.S. homes sputtered in January amid high prices and limited supply.
Existing-home sales decreased 1.3% in January compared with December at a seasonally adjusted annual rate of 5.46 million, the National Association of Realtors said Friday.
That compared with economists’ expectations for a 2% decline last month.
“Home sales are just moving sideways, not really breaking out higher even though the economic backdrop is very favorable,” said Lawrence Yun, the NAR’s chief economist, citing a lack of housing inventory.
Existing-home sales were up 9.6% in January from a year earlier. A persistent drag on the housing market has been a dearth of inventory.
At the current sales pace, there was a 3.1-month supply of homes on the market at the end of January compared with 3.8 at the same time in the previous year. Limited housing stock has contributed to higher home prices, with the median sales price for an existing home in January up 6.8% from the prior year at $266,300.
NAR said the housing inventory level was the lowest for January since 1999. Inventory has been tight at the cheaper end of the market. Homes priced from $100,000 to $250,000 saw a 10.3% drop in inventory from a year earlier in January. Meanwhile, homes in the $250,000 to $500,000 range saw inventory fall 6%.
Some positive signs have emerged that suggest more inventory could soon flow onto the market.
Residential permits, which can be a bellwether for future home construction, rose 9.2% from the previous month in January, the Commerce Department said Wednesday, hitting a 13-year high.
A measure of U.S. home-builder confidence eased for the second-straight month in February, to 74 from 75 in January, but remained near a two-decade high, the National Association of Home Builders said Tuesday.
Low joblessness is one factor supporting demand for home buying. The U.S. unemployment rate was 3.6% in January, close to a 50-year low. Consumer confidence also remains high.
Furthermore, borrowing conditions for homeowners are generally better than a year ago. The average interest rate on a 30-year ﬁxed mortgage was 3.62% in January, according to Freddie Mac, well below the 4.46% in January last year.
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