In January, existing house sales in the United States reached their lowest level in more than 12 years, but the rate of decrease moderated, fostering cautious optimism that the housing market downturn may be nearing its end.
The National Association of Realtors’ study released on Tuesday also revealed the least yearly growth in home prices since 2012, which ought to enhance affordability. However, it will take some time before the housing market recovers.
Mortgage rates have resumed their upward trend after robust retail sales and labor market data as well as strong monthly inflation readings raised the prospect of the Federal Reserve maintaining its interest rate hiking campaign through summer.
Existing home sales fell 0.7% to a seasonally adjusted annual rate of 4.00 million units last month, the lowest level since October 2010, when the nation was grappling with the foreclosure crisis. That marked the 12th straight monthly decline in sales, the longest such stretch since 1999.
Sales fell in the Northeast and Midwest, but rose in the South and West. Economists polled by Reuters had forecast home sales rising to a rate of 4.10 million units. Home resales, which account for the biggest share of U.S. housing sales, plunged 36.9% on a year-on-year basis in January.
The housing market has been the biggest casualty of the Fed’s aggressive monetary policy tightening. Residential investment has contracted for seven straight quarters, the longest such stretch since 2009.
According to government figures released last week, the number of single-family homes built and prospective home construction permits declined in January.
According to data from mortgage financing company Freddie Mac, the average 30-year fixed mortgage rate increased last week to 6.32% from 6.12%. A jump in U.S. Treasury yields was reflected in the second consecutive weekly increase.
American stock prices were falling. In relation to a currency basket, the dollar remained stable. Treasury prices dropped.