The sales of previously owned homes slumped in January for the second month in a row, raising fresh concerns about the housing market’s potential for rebound, according to industry statistics released on Friday.
Resales of houses, townhouses, condominiums and cooperatives fell 7.2 percent to a seasonally adjusted annual rate of 5.05 million in January from December, the National Association of Realtors reported.
The sales are 11.5 percent higher than they were a year earlier, but the monthly trend is “not encouraging,” the group’s chief economist, Lawrence Yun, said in a statement.
The sales figures come just days after the federal government reported that sales of newly built homes fell to their lowest level since 1963, when the government first started tracking those numbers.
In both cases, many economists had expected a less drastic drop in sales activity. January’s existing home sales were at their weakest point since June.
The federal government has taken unprecedented measures to stimulate the battered housing market, and these numbers suggest that the sector remains volatile despite these efforts. The Federal Reserve initiated a program that helped drive down interest rates to record lows, while Congress passed a tax credit last year for first-time homebuyers and then extended it through April 30 and expanded it to include more buyers, including some current homeowners.
“What all of this tells me is that once you take away the programs in place to counteract the housing slump, it’s clear that housing faces a very difficult road ahead,” said Mark Vitner, a senior economist at Wells Fargo Securities.
As the deadline for the tax credit approaches, sales should pick up, the number of homes on the market should shrink and prices should stabilize, the Realtors’ group said.
“Values are beginning to firm, but with great variance around the country,” Yun said. The median price of an existing home was $164,700 in January, unchanged from a year earlier.
