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US existing home sales fall sharply to 3-year low

Key Points
  • U.S. home sales fell in January to their lowest level in more than three years and house prices rose only modestly.
  • The National Association of Realtors said on Thursday existing home sales dropped 1.2 percent to a seasonally adjusted annual rate of 4.94 million units last month.
  • That was the lowest level since November 2015 and well below analysts' expectations of a rate of 5.0 million units.
Daniel Acker | Bloomberg | Getty Images

U.S. home sales fell in January to their lowest level in more than three years and house prices rose only modestly, suggesting a further loss of momentum in the housing market.

The National Association of Realtors said on Thursday existing home sales dropped 1.2 percent to a seasonally adjusted annual rate of 4.94 million units last month.

That was the lowest level since November 2015 and well below analysts' expectations of a rate of 5.0 million units. December's sales pace was revised slightly higher.

The drop in January came after months of weakness in the U.S. housing market. Existing home sales were down 8.5 percent from a year ago.

VIDEO1:3101:31
State of the Housing Market

The U.S. housing market has been stymied by a sharp rise in mortgage rates since 2016 as well as land and labor shortages. That has led to tight inventory and more expensive homes.

At the same time, the 30-year fixed mortgage rate has dipped in recent months and house price inflation is slowing.

The median existing house price increased 2.8 percent from a year ago to $247,500 in January. That was the smallest increase since February 2012.

Last month, existing home sales fell in three of the country's four major regions, rising only in the Northeast.

There were 1.59 million previously owned homes on the market in January, up from 1.53 million in December.

At January's sales pace, it would take 3.9 months to exhaust the current inventory, up from 3.7 months in December. A supply of six to seven months is viewed as a healthy balance between supply and demand.

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Real Estate

New home sales tank 19 percent to end 2018

Eddie Noralus works on a Toll Brothers home on August 21, 2018 in Boca Raton, Florida.
Joe Raedle | Getty Images
Key Points
  • Sales of newly built homes fell 18 percent in December compared with December of 2017, according to data compiled by John Burns Real Estate Consulting, a California-based housing research and analytics firm.
  • Due to the partial government shutdown, official government figures on home sales for November and December have not been released.
  • Sales were also down a steep 19 percent annually in November, according to JBRC's analysts. The firm counts 373 market ratings by local builders overseeing more than 3,500 new home communities, estimated to be 16 percent of U.S. new home sales.
  • JBRC's figures correlate closely with government readings.