WASHINGTON – Sales of previously owned U.S. homes dropped in January to the lowest level in more than a year as harsh winter weather combined with a lack of supply, tight credit and declining affordability slowed demand.
Purchases decreased 5.1 percent to a 4.62 million annual rate last month, the fewest since July 2012, figures from the National Association of Realtors showed Friday in Washington. The median forecast of 79 economists surveyed by Bloomberg projected sales would drop to a 4.67 million rate. Sales fell in all four regions of the country.
The figures reflect closings on contracts signed months earlier and highlight how higher borrowing costs and property prices have slowed momentum in residential real estate. More progress in the labor market that generates stronger wage growth would help reinvigorate demand.
“It’s likely the weather played some role, but just as much of a role was played by lower inventories, higher mortgage rates, slightly higher prices and tighter credit,” said Robert Rosener, an economist at Credit Agricole CIB in New York, who correctly projected the drop in sales. “We’re on a positive trajectory, and when the spring comes we should see a bounce back.”
Stocks held earlier gains after the report. The Standard & Poor’s 500 Index climbed 0.1 percent to 1,841.09 at 10:30 a.m. in New York as Hewlett-Packard Co. and Priceline.com Inc. results topped estimates.
Estimates in the Bloomberg survey of economists ranged from a sales pace of 4.5 million to 4.9 million. December’s figure was unrevised at a 4.87 million pace.