The National Association of Realtors reported that sales of existing homes fell 5.1 percent last month, from an annual rate of 4.87 million units in December to 4.62 million in January, due in large part to bad weather and low inventory.
Home prices also continued to rise and, combined with higher mortgage rates, these factors kept some buyers away as well during what is normally a very slow time of the year for home sales, requiring large seasonal adjustments that can make the data difficult to interpret.
The January sales rate was the lowest since July 2012 as first time buyers dropped to a record low of just 26 percent. Only 11 percent of January sales were foreclosures and 4 percent were short sales, down sharply from a year ago, as all-cash sales accounted for 33 percent of transactions. Investors were behind 20 percent of all home purchases last month with 70 percent of these being cash transactions.
Consistent with seasonal price weakness that is to be expected at this time of the year, the median existing home price fell from $198,000 in December to $188,900 last month, however, home values are 10.7 percent higher than a year ago.
Particularly after a winter like this, it’s a good idea to wait until spring to draw any conclusions about the health of the nation’s housing market.