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Sales of existing US homes fell last month for the first time since September, as the combination of high mortgage rates and prices sets a grim backdrop heading into the crucial spring selling season. Contract closings in January decreased 4.9% to an annualized rate of 4.08 million, data released Friday by the National Association of Realtors® show.
Sales declined the most in the West and South, which were afflicted by destructive wildfires in Los Angeles and severe winter storms, respectively. To the extent weather played a role, those sales are just a matter of timing and will probably take place in subsequent months instead, NAR Chief Economist Lawrence Yun said on a call with reporters.
"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve," Yun said in a statement. "When combined with elevated home prices, housing affordability remains a major challenge."
Properties stayed on the market for 41 days on average in January, the highest in five years. Yun said homes tend to sit on the market longer in January and he expects the duration to shorten by the spring.