Existing home sales in the U.S. unexpectedly showed a steep drop in the month of January, according to a report released by the National Association of Realtors on Wednesday.
NAR said existing home sales tumbled by 3.2 percent to an annual rate of 5.38 million in January from a downwardly revised 5.56 million in December.
The decrease surprised economists, who had expected existing home sales to climb to a rate of 5.60 million from the 5.57 million originally reported for the previous month.
With the unexpected monthly decrease, existing home sales were down by 4.8 compared to the same month a year ago, the biggest year-over-year decline since August of 2014.
“While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace,” said NAR chief economist Lawrence Yun.
He added, “It’s very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth.”
The report said the median existing home price for all housing types in January was $240,500, up 5.8 percent from the same month a year ago.
Housing inventory at the end of January rose 4.1 percent to 1.52 million existing homes available for sale, but is still 9.5 percent lower than a year ago. Unsold inventory represents 3.4 months of supply at the current sales pace.