WASHINGTON (Reuters) – U.S. home resales in January fell to their lowest level in 12 years but at a slower pace than previously, suggesting that the housing market is on the verge of a bottom out, fueling cautious optimism.
The National Association of Realtors (NAR) on Tuesday reported a 0.7% drop in resales last month to 4.0 million annualized, the lowest level since October 2010.
Economists polled by Reuters on average expected home resales to rise to 4.10 million from 4.02 million in December.
These sales have thus been declining for 12 consecutive months, a cycle not seen since 1999.
The rise in the cost of credit in the United States, which began in March 2022, weighs on the real estate market while several officials of the American Federal Reserve plead for a continuation of the rise in the cost of money beyond 5% against inflation deemed still too high.
Residential investment has contracted for seven straight quarters, the longest ongoing streak since 2009.
But the worst is probably over as homebuilder sentiment, although still negative, rebounded in February to a five-month high.
The average rate on a 30-year home loan rose to 6.32% last week from 6.12% the previous week, according to data from mortgage finance agency Freddie Mac. This increase, the second consecutive in as many weeks, reflects the rise observed in bond yields after the solidity of the latest macroeconomic data.
The median resale price of a home also rose, 1.3% year on year in January, to $359,000.
Some 980,000 second-hand homes were on the market in January, up 2.1% from December and 15.3% year-on-year, which means at current sales rates it would take 2.9 months to deplete the current stock, compared to 1.6 months a year ago.
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(Report Lucia Mutikani; French version Claude Chendjou, edited by Kate Entringer)
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