Sales to purchase an existing home started the year lower as higher mortgage rates dampened housing activity.
Existing home sales declined 4.9% in January to a seasonally adjusted annual rate of 4.08 million, according to the National Association of Realtors. Economists polled by Bloomberg expected existing home sales to hit a pace of 4.13 million in January.
“Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve,” NAR chief economist Lawrence Yun said in a statement. “When combined with elevated home prices, housing affordability remains a major challenge.”
House hunters have been on the fence about buying a home due to expensive housing costs. Mortgage rates have drifted lower over the past few weeks but remain around 7%, challenging many potential buyers.
The median home sale price rose 4.8% from a year ago to $396,900, and January marked the 19th consecutive month of year-over-year price increases.
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