U
S home sales declined in January, as rising mortgage rates and prices deterred potential buyers despite an increase in available properties. Sales fell 4.9% from December to a seasonally adjusted annual rate of 4.08 million units, missing economists' expectations of 4.11 million.

    Home prices continued their upward trend for the 19th consecutive month, with the national median sales price rising 4.8% in January to $396,900. However, this increase may not be enough to offset the impact of high mortgage rates, which have hovered around 7% this year.

    The US housing market has been struggling since 2022, when mortgage rates began to rise from pandemic-era lows. Sales fell last year to their lowest level in nearly 30 years. First-time buyers, who typically account for a larger share of the market, made up only 28% of sales last month, down from 31% in December.

    Despite an increase in available homes, the market remains skewed towards sellers. There were 1.18 million unsold homes at the end of January, a 3.5-month supply at the current sales pace. Homes are taking longer to sell, with an average of 41 days on the market last month, up from 35 days in December.

    Lawrence Yun, NAR's chief economist, notes that mortgage rates have refused to budge despite multiple interest rate cuts by the Federal Reserve. This, combined with elevated home prices, has made housing affordability a major challenge. While slight dips in mortgage rates may prompt some buyers to act, it remains to be seen whether this will be enough to revive the struggling US housing market.