|Logo of the National Association of Realtors. (Photo credit: Wikipedia)|
U.S. home resales fell sharply to their lowest level in nine months in January amid a shortage of properties on the market, a setback that could temper expectations for an acceleration in housing activity this year.
The National Association of Realtors said on Monday existing home sales declined 4.9 percent to an annual rate of 4.82 million units, the lowest level since April last year.
"The general tone of this report was weak and it adds to a wide array of housing indicators that have been pointing in the wrong direction, underscoring continued sluggishness in this crucial segment of the economy," said Millan Mulraine, deputy chief economist at TD Securities in New York.
Sales fell in all four regions. Revisions to sales data going back to 2012 were minor. Sales slumped last month despite a decline in mortgage rates, which saw the 30-year rate hitting a 20-month low.
Tight inventories are hurting sales by limiting the selection of houses available to potential buyers. The lack of supply is also keeping house prices elevated, helping to sideline first-time buyers from the market.
There is hope that a tightening labor market would spur sturdy wage growth and pull first-time buyers into the market. But unless there is a significant pickup in the number of homes available for sale, the housing recovery could remain sluggish.
Housing has so far lagged the overall economic recovery.
Economists polled by Reuters had forecast existing home sales falling only to a 4.97-million unit pace last month. Sales were up 3.2 percent from a year ago.
U.S. Treasury debt prices extended gains on the data, while the dollar pared gains against the euro. The U.S. housing index .HGX was trading lower in line with an overall weak market.