U.S. existing home sales dropped 8.4% in January to a seasonally adjusted annual rate of 3.91 million units, the lowest since December 2023.
Sales declined more than expected; economists had projected a rate of 4.18 million units.
The big picture: The decrease reflects contracts signed in November and December, not impacted by January’s winter storms.
- Home sales fell 4.4% compared to last year.
- The NAR’s housing affordability index rose to 116.5 in January, the highest since March 2022.
- Mortgage rates have declined as the FHFA started buying bonds from Fannie Mae and Freddie Mac, but progress has stalled amid rising Treasury yields and inflation concerns.
- Inventory of existing homes fell 0.8% from December, to 1.22 million units; supply is up 3.4% from last year.
Go deeper: At the current sales pace, it would take 3.7 months to exhaust inventory, up from 3.5 months a year ago.
- The median existing home price rose 0.9% to $396,800, a record for January.
- Median days on market increased to 46 from 41 a year ago.
- First-time buyers accounted for 31% of sales, up slightly from last year but below the 40% considered healthy.
- All-cash sales made up 27% of transactions, down from 29% a year ago.
- Distressed sales (foreclosures and similar) made up 2% of transactions, down from 3% a year ago.
