Existing Home Sales Fall 4.9% Amid Rising Prices

Sales of previously occupied U.S. homes decreased by 4.9% in January, with a seasonally adjusted annual rate of 4.08 million units, according to the National Association of Realtors (NAR). This decline occurred despite a 2% increase from January 2024, marking the fourth consecutive year-over-year rise. The median home price rose to $396,900, reflecting a 4.8% increase from the previous year, continuing a trend of rising prices for 19 months. The housing market is facing challenges from high mortgage rates, which hover around 7%, making homeownership less accessible, particularly for first-time buyers. Inventory levels increased to 1.18 million unsold homes, translating to a 3.5-month supply, indicating a growing selection but still below the balanced market range. Economists suggest that both increased inventory and lower mortgage rates are necessary to stimulate further market activity.