US homes sales fell sharply in January, even as mortgage rates continued to ease

Core Insights - Sales of previously occupied U.S. homes fell sharply in January, with an 8.4% decline from December to a seasonally adjusted annual rate of 3.91 million units, marking the largest monthly drop in nearly four years [1][2] - Year-over-year, sales decreased by 4.4% compared to January of the previous year, falling short of the expected pace of 4.105 million units [2] - The U.S. housing market has been experiencing a sales slump since 2022, attributed to rising mortgage rates, high home prices, and a chronic shortage of homes [4] Sales Performance - Home sales slowed across all regions: Northeast, Midwest, South, and West [2] - Sales have remained close to a 4-million annual pace since 2023, significantly below the historical norm of 5.2 million annual sales [5] Home Prices - Despite the decline in sales, the national median sales price increased by 0.9% in January from a year earlier, reaching $396,800, marking 31 consecutive months of annual price increases [3] Mortgage Rates - The average rate on a 30-year mortgage briefly dropped to 6.06% in January, the lowest since September 2022, but has since risen slightly, remaining just above 6% [6] Affordability Challenges - Affordability continues to be a significant challenge for many potential homeowners, particularly first-time buyers lacking equity from previous homes [7] - Economic and job market uncertainties are also contributing to the hesitation among prospective buyers [7]