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Existing Home Sales Slump 5.1% as Weather Takes Toll

By Justin Loiseau - Feb 21, 2014 at 12:35PM

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Tight inventory keeps house prices pushing higher.

Sales of existing homes fell 5.1% to a seasonally adjusted annual rate of 4.62 million for January, according to a National Association of Realtors (NAR) report released today.

Analysts had expected a dip from December's 4.87 million rate, but their 4.65 million estimate proved overly optimistic. January's sales activity was the lowest since July 2012 and is 5.1% below year-ago rates. The numbers include completed transactions on single-family homes, townhomes, condominiums, and co-ops.

According to the NAR, weather was part of the problem with January's cold shoulder. "Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception," said NAR Chief Economist Lawrence Yun in a statement.

But although Yun expects activity to pick up some in the spring, he also noted the roles that tight credit, low inventory, and increasingly expensive houses and mortgage rates play on sales.

As sales dropped off, the median sales price is up 10.7% over the last 12 months to $188,900. The median time on the market in January was 67 days, down five days from December.

For the same month, the housing inventory rose 2.2% to 1.9 million existing homes. At the current sales rate, this represents a 4.9-month supply of existing homes, up from December's 4.6-month supply.

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