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.