Us home sales fall to lowest rate in nine months

Photo: TaxRebate.org.uk

US home sales slowed to their lowest rate in nine month in January 2015, according to the National Association of Realtors.

The latest market report shows that existing home sales fell 4.9 per cent in January 2015 to 4.82 million - the lowest number recorded since April 2014 (4.75 million). All major regions experienced declines in January, with the Northeast and West seeing the largest.

Despite January’s decline, though, sales are 3.2 per cent higher than a year ago.

Lawrence Yun, NAR chief economist, says the housing market got off to a somewhat disappointing start: "January housing data can be volatile because of seasonal influences, but 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."

Total housing inventory at the end of January increased 0.5 percent to 1.87 million existing homes available for sale, but is 0.5 per cent lower than a year ago, with unsold inventory at a 4.7-month supply at the current sales pace – up from 4.4 months in December.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage in January fell to 3.67 percent, its lowest level since May 2013 (3.54 percent), and down from 3.86 percent in December. Nonetheless, Yun says that despite the low rates attracting potential buyers, the lack of new - and affordable - listings is causing buyers to delay decisions.

Nonetheless, property values continue to improve. The median existing-home price for all housing types in January was $199,600, 6.2 per cent above January 2014 - the 35th month of annual growth in a row.

"Although sales cooled in January, home prices continued solid year-over-year growth," adds Yun. "The labor market and economy are markedly improved compared to a year ago, which supports stronger buyer demand. The big test for housing will be the impact on affordability once rates rise."