Existing home sales in January fell to their lowest level in nine months led by shortage of homes on the market.
The latest numbers from the National Association of Realtors show a drop of 4.9% to a seasonally adjust yearly rate of 4.82 million. Forecasts had put closings at 4.97 million. Sales were down in all regions of the nation.
The inventory shortage has limited choices and kept prices high, causing some to hold off while scaring away first-time buyers. NAR chief economist Lawrence Yun says it’s going to be tough cycle to break, “…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. Realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading some to delay decisions.”
Inventory was up slightly but still down year-over-year, while the average cost of a new home is $199,600, 6.2% higher than a year ago. The above average price marks 35 months of year-over-year price gains.