U.S. home sales fell 1.2% in January to their slowest pace in more than three years as persistent affordability problems put a harsh chill on the real estate market.
The National Assn. of Realtors said Thursday that sales of existing homes declined 1.2% last month to a seasonally adjusted annual rate of 4.94 million, the slowest sales rate since November 2015.
During the last 12 months, sales have plunged 8.5%. Would-be homebuyers are increasingly priced out of the market as years of climbing prices and strained inventories have made buying too costly. A solid job market has done little to boost sales, with the sharpest annual sales declines among homes priced less than $250,000.
Still, prospective buyers may find some relief as average mortgage rates have declined this year and price growth has slowed.
The median sales price in January was $247,500, a slight increase of 2.8% from a year earlier. After eclipsing wage gains for several years, home prices in this report are now rising at a slower rate than average hourly earnings.
On a monthly basis, home sales fell in the Midwest, South and West. Sales increased in the Northeast.
In January, the most recent data show, Southern California home sales dropped to their lowest level since 2007.