U.S. home sales retreated 1.3% in January from the prior month, but low mortgage rates helped enable an increase in purchases from a year ago.
The National Association of Realtors said Friday that sales of existing homes slipped last month to a seasonally adjusted annual rate of 5.46 million. Sales have climbed 9.6% over the past 12 months as borrowing costs have fallen. But sales could be squeezed in the coming months because of a shortage of homes listed for sale.
Just 1.42 million homes were on the market at the end of January, a 10.7% decline from a year ago. With fewer homes for sale, would-be buyers have fewer options and prices are rising faster than wage growth.
The median sales price in January was $266,300, up 6.8% from a year ago.
Still, a solid economy and low mortgage rates are boosting demand for housing. Workers have an increased sense of security with the unemployment rate hovering near a half-century low at 3.6%. Meanwhile, the average interest rate charged on a 30-year mortgage was 3.49% this week, down from 4.35% a year ago, according to mortgage buyer Freddie Mac.