WASHINGTON: Sales of existing homes in the United States dropped in January for the third consecutive month, hitting their lowest level in more than three years, industry data showed on Thursday (Feb 21).
The result underscored the recent weakness in the US housing market, but economists say current conditions suggest sales should recover in the coming months.
The January figures from the National Association of Realtors showed prices had also risen at their slowest pace in almost seven years while inventories moved higher - both helping ease what had been an exceedingly tight market in recent years.
Total sales of single-family homes and apartments dipped 1.2 per cent to an annual rate of 4.94 million, seasonally-adjusted, the lowest level since November of 2015, according to NAR.
Economists had instead been expecting a small increase over December, which was slightly revised upward.
The result put sales down 8.5 per cent below their level of a year ago.
NAR Chief Economist Lawrence Yun said sales had likely hit their "cyclical low."
"Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months," he said in a statement.
Inventories rose 3.9 per cent to 1.59 million units for sale, creating a 3.9 month supply at the current sales rate, up from 3.7 months in December.
Median prices rose 2.8 per cent over January of last year to US$247,500. Meanwhile, 30-year mortgage rates fell on average to 4.46 per cent, down from 4.64 per cent the month before.
Jim O'Sullivan of High Frequency Economics, which was not involved in producing the report, said mortgage applications had risen in January, suggesting later months would see higher sales.
"We expect a more positive reading" in February, he said in a client note.