US existing home sales dropped more than expected in January, falling 4.9% to a seasonally adjusted annual rate of 4.08 million units. Economists had forecast a decline to 4.12 million units.
The decrease was likely due to contracts signed in November and December, as mortgage rates continued to rise. The average 30-year fixed mortgage rate increased from 6.72% at the end of October to 6.85% in December.
Home resales still increased 2.0% year-on-year, but housing affordability remains a challenge due to high prices and elevated mortgage rates. The inventory of existing homes rose 3.5% to 1.18 million units, with supply increasing 16.8% from last year.
At the current sales pace, it would take 3.5 months to exhaust the current inventory, indicating a four-to-seven-month supply is needed for a healthy balance between supply and demand.
Source: https://finance.yahoo.com/news/us-existing-home-sales-fall-150825799.html