Existing home sales south of the border unexpectedly fell last month, leading to the biggest year-on-year decline in more than three years, as a persistent shortage of houses pushed up prices and kept first-time buyers out of the market.
The National Association of Realtors said on Wednesday that U.S. existing home sales dropped 3.2% to a seasonally adjusted annual rate of 5.38 million units last month. It was the second straight monthly decline and reflected decreases in all four regions.
Economists had forecast existing home sales rising 0.9% to a rate of 5.60 million units in January.
Existing home sales, which account for about 90% of U.S. home sales, declined 4.8% on a year-on-year basis in January. That was the biggest year-on-year drop since August 2014. The weakness in home sales is largely a function of supply constraints rather than a lack of demand.
House price increases have outstripped wage growth, which has remained stuck below 3% on an annual basis despite the unemployment rate being at a 17-year low of 4.1%.
While the number of previously-owned homes on the market rose 4.1% to 1.52 million units in January, housing inventory was down 9.5% from a year ago, the lowest inventory for January on record. Supply has declined for 32 straight months on a year-on-year basis.
