U.S. existing home sales plunges in January

Existing home sales in the United States declined in January, indicating an uneven recovery of the housing market.

Total existing home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co- ops, fell 4.9 percent from the previous month to a seasonally adjusted annual rate of 4.82 million in January, the lowest rate in nine months, said the National Association of Realtors (NAR) Monday. But the sales were 3.2 percent higher than a year ago.

NAR chief economist Lawrence Yun attributed the sales decline to the low housing supply and the ongoing rise in home prices above the pace of inflation despite the historic low mortgage interest rates, saying that "realtors are reporting that low rates are attracting potential buyers, but the lack of new and affordable listings is leading to some to delay (purchase) decisions."

Total housing inventory at the end of January increased 0.5 percent to 1.87 million existing homes available for sales, which represents a 4.7-month supply at the current sales pace.

The median existing home price for all housing types in January was 199,600 U.S. dollars, 6.2 percent above the level in January 2014.

According to mortgage giant Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage dropped to 3. 67 percent in January, the lowest level since May 2013.

Existing home sales account for a larger share of the market than new home sales.

The improved labor market and economy will support stronger buyer demand, said Yun, who believed the big test for housing will be the impact on affordability once rates rise. Endite