Existing home sales in January see biggest drop in 3 years

U.S. sales of existing homes fell in January, exhibiting the largest year-over-year drop in more than three years. Would-be buyers were stymied by rising prices and a shortage of homes for sale.

The National Association of Realtors says sales dropped 3.2 percent last month, the second straight decline, to a seasonally adjusted annual rate of 5.38 million. That was the slowest sales pace since September. Sales dropped 4.8 percent in January compared with 12 months earlier — the steepest such decline since 2014.

A lack of available homes is holding back sales, even as Realtors report that more people are visiting open houses and demand is strong.

While "buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January's pace," Lawrence Yun, the NAR's chief economist, said in a statement. "It's very clear that too many markets right now are becoming less affordable and desperately need more new listings to calm the speedy price growth."

The total supply of homes for sale dipped to 1.52 million, the fewest for any January since records began in 1999.