Investing.com - Sales of previously-owned U.S. homes fell unexpectedly in January, to the lowest level in more than three years, but the National Association of Realtors believes they have finally hit a bottom.
Existing home sales fell 1.2% in January from the previous month to an annualized pace of 4.94 million units, according to NAR figures released on Thursday.
After hitting their lowest level since November 2015, NAR’s chief economist Lawrence Yun said that sales likely hit a bottom in January. Inventories of unsold houses rose for the sixth straight month to 1.59 million, from 1.53 million in December
“Existing home sales in January were weak compared to historical norms; however, they are likely to have reached a cyclical low,” he said.
The NAR acknowledged that affordability in the real estate market - and a lack of lower-priced housing in general - remained a problem. But it said it expects affordability to improve in the course of the year.
One reason for that may be that mortgage rates have started to decline again as the Federal Reserve has suspended its policy of official rate hikes. The NAR cited Freddie Mac data showing that the average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 4.46 percent in January from 4.64 percent in December.
“Moderating home prices combined with gains in household income will boost housing affordability, bringing more buyers to the market in the coming months,” Yun predicted.