existing home sales
Gene J. Puskar/AP
By Lucia Mutikani

WASHINGTON -- U.S. home resales fell to an 18-month low in January as the combination of cold weather and a lack of housing stock sidelined potential buyers.

The National Association of Realtors said Friday home sales dropped 5.1 percent to an annual rate of 4.62 million units, the lowest level since July 2012. December's sales pace was unrevised at 4.87 million.

"Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception," said Lawrence Yun, NAR chief economist. "Some housing activity will be delayed until spring."

Economists polled by Reuters had expected sales to fall to a 4.68 million pace last month. Existing home sales are counted at the closing of contracts. January's sales mostly reflected contracts signed in December.

With temperatures remaining chilly in January, February sales will probably be weak.

Sales tumbled in the Northeast, South and Midwest, which were hit by snow storms and ice last month. They were down 7.3 percent in the West, an indication that other factors apart from the weather weighed down on sales.

Fundamentals in the sector have weakened somewhat. Mortgage rates have risen and the increase in house prices has far outpaced income growth, making home buying less affordable.
In addition, there has been less housing stock on the market and household formation fell sharply in 2013. Home resales have declined in five of the last six months, having peaked in July.

Home sales were down 5.1 percent in January from a year-ago.

The existing home sales report added to other weak housing data such as housing starts and permits. It was also the latest indication the economy started 2014 on a weak footing.

Weak homes sales weighed on brokers' commissions in the fourth quarter, contributing to a contraction in the residential sector for the first time in nearly three years.

In January, the inventory of unsold homes on the market rose 2.2 percent from December, pushing the months' supply to 4.9. While that was up from December's 4.6 months, it remained below the 6 months that is normally considered as a healthy balance between supply and demand.

With inventory still tight, the median price for a previously owned home rose 10.7 percent from a year ago to $188,900.

Other details of the report were a bit downbeat. First-time buyers accounted for 26 percent of the transactions, the lowest share since the Realtors group started tracking the series in October 2008. A market share of 40 percent to 45 percent is considered by economists and real estate professionals as ideal.


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frank1946

New Normal...............won't change !

February 22 2014 at 12:40 AM Report abuse +1 rate up rate down Reply
createidea

WASHINGTON -- U.S. home resales fell to an 18-month low in January as the combination of cold weather and a lack of housing stock sidelined potential buyers....

Oh this why resales fell........ I see.

LOL !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

February 21 2014 at 4:28 PM Report abuse +1 rate up rate down Reply
cvanac8550

A tick up in the interest rate can make home ownership difficult for many. In the North Jersey I can find affordable homes but the property taxes put them out of reach. 7 -10 k in property taxes on a 300k home is out of control. Interestingly enough the counties with the highest property taxes seem to have the most Malls,strip malls and coorporate headquarters ,mega auto dealership and businesses in general. So one would have to figure that the businesses are not paying their share....Now Gov. Cuomo is offering tax free zones in N.Y to businesses for ten years.So they start up the business without the tax burden which is transferred to the property owners and then after ten years they move the business offshore or down south. Yeah I know job creation...hopefully they will be good paying jobs...I doubt it...
There's no end to this madness......

February 21 2014 at 3:01 PM Report abuse +4 rate up rate down Reply
dunlapjackie

Fort Lauderdale is the place to live. Home prices are not too high and affordable, taxes low, weather gorgeous. Get out of all that snow and ice. It's only going to get worse.

February 21 2014 at 2:55 PM Report abuse rate up rate down Reply
dunlapjackie

This article was about home sales. What about South Florida, weather is not an issue here. Gorgeous weather, sunny, and Fort Lauderdale is a beautiful place to live. There are homes for sale, but the inventory is going fast. Move here and avoid all that snow and high taxes.

February 21 2014 at 2:51 PM Report abuse -1 rate up rate down Reply
toosmart4u

It is a rough job President Obama cleaning up the mess from the bush jr. administration. Which is what the republicans are trying to forget.

February 21 2014 at 2:30 PM Report abuse -3 rate up rate down Reply
2 replies to toosmart4u's comment
truthnocharge

That must be why President Bush
had a higher approval rate then Obama does today....
And why when Liberals were polled recently, that 30% regret their Obama vote.!
Perhaps that is also why 69% of America reject Obama's "ACA"..

February 21 2014 at 2:34 PM Report abuse +2 rate up rate down Reply
jj2301

Oh, please! Had Obama not made the Obamacare power grab; had he not come into office bashing business, radically changing lending and creditor regulations when all he had to do was restore the provisions Clinton stripped from Glass Steagal, the recession would have been over far, far quicker.

Obama alone created an environment where business could not predict the regulatory and human resources costs associated with expansion. Had he not done those things, businesses would have had the confidence to invest. As is stands, the Obamacare splat is still hitting the fan and businesses refuse to invest until the fallout is clear.

Stop blaming Bush; Obama has owned this for at least 3 years now.

February 21 2014 at 2:41 PM Report abuse +1 rate up rate down Reply
NJPACKFAN

Bad for the economy......a non issue for Wall Street.

February 21 2014 at 1:09 PM Report abuse rate up rate down Reply
jj2301

@RMS, that's part of it and the other pert is that lending has tightened. When I refinanced last year, the qualification standard were very strict. Even with an 830 FICO score, my lender wanted the full 20% down and my DTI with the mortgage is quite comfortable. Most people in the market can't come up with that kind of cash and even if they can, the risk of investing it in something as difficult to liquidate as Real Estate makes one think twice.

Perhaps that's good; the gains to be had will be slower-growth, but maybe we won't see the bubble like we did in 2006/2007.

February 21 2014 at 11:53 AM Report abuse rate up rate down Reply
RMS

Part of the problem is economic uncertainty. There are many people who would like to buy a home, but the fear of committing to a mortgage and not knowing if you will have a job in the next year is holding buyers back. I don't think the weather is a factor, if a buyer or seller is serious they will be out and in the market. I have noticed that homes in my area are sitting on the market longer than they were a year ago, but there is still a lack of inventory.

February 21 2014 at 11:27 AM Report abuse +1 rate up rate down Reply
jdykbpl45

The cause: Obama's lousy economy, the job loss due to his stupid policies, millions on the dole, and obama care.

February 21 2014 at 10:29 AM Report abuse +1 rate up rate down Reply
1 reply to jdykbpl45's comment
jrb359

I think obamacare is the biggest factor. Having the threat of getting a lay off slip or having your hours reduced sharply, and having to possibly pay a higher premium and deductable that the government is now FORCING on people could be the main factor. But look at the bright side that Pelosi pointed out that you would have more time to spend with your family and you could take up a hobby like painting! These people are completely out of touch!

February 21 2014 at 12:56 PM Report abuse +1 rate up rate down Reply