Sales of previously owned houses fell in January to the lowest rate in nine months, suggesting another step back in the weak housing recovery.
Existing homes were sold at a 4.82 million annual pace in January, adjusted for seasonal fluctuations, down 5 percent from 5.07 million in December, the National Association of Realtors reported Monday.
Sales were up slightly from a year earlier. But that year-over-year rise occurred only because this time last year many sales were choked off by abrupt rise in mortgage rates caused by the Federal Reserve’s decision to begin slowing its monetary stimulus campaign.
Rates for 30-year fixed-rate mortgages fell during 2014, and are at 3.76 percent currently, according to Freddie Mac.
National Association of Realtors chief economist Lawrence Yun said that “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.”
He added that real estate agents are “reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
Inventory of homes for sale ticked up to 1.87 million in January, but that is still lower than the levels of the past few years. Inventory peaked at above 4 million prior to the 2008 housing crisis, from which the country is still recovering.
Tight inventory can be one factor pushing prices up. In January, the median home price was $199,600, up 6 percent annually, according to the report.
Although the East Coast suffered unusually tough winter weather early in 2015, that did not appear to be the cause of the weakness in home sales. The West suffered the worst declines, even though it did not have the same problems with snowstorms.
Monday’s report adds to recent downbeat news about housing. Home builders began construction on new houses at a 1.065 million annual rate in January, the Census Bureau reported last week. Housing starts are seen by experts as a sign of expected demand for housing, since builders generally do not begin projects unless they are confident the houses will sell.
Nevertheless, one positive from Monday’s report is that distressed sales — sales of foreclosed homes or “short sales” of underwater homes to avoid foreclosures — are down 15 percent from January 2014. Such distressed sales have made up a smaller share of total home sales over the past few years, as the worst of the housing crisis fades.
