The National Association of Realtors said on Thursday existing home sales dropped 1.2 percent to a seasonally adjusted annual rate of 4.94 million units last month.
That was the lowest level since November 2015 and well below analysts’ expectations of a rate of 5.0 million units. December’s sales pace was revised slightly higher.
During the past 12 months, sales have plunged 8.5 percent. Would-be homebuyers are increasingly priced out of the market as years of climbing prices and strained inventories have made ownership too costly. A solid job market has done little to boost sales, with the sharpest annual sales declines being among homes priced less than $250,000.
On a monthly basis, home sales fell in the Midwest, South and West. Sales increased in the Northeast.
The average interest charged on a 30-year, fixed rate mortgage this week was 4.35 percent this week, down from an average as high as roughly 5 percent last year, according to mortgage buyer Freddie Mac.
At the same time, the 30-year fixed mortgage rate has dipped in recent months and house price inflation is slowing.
The U.S. housing market has been affected by a sharp rise in mortgage rates since 2016 as well as land and labor shortages. That has led to tight inventory and more expensive homes.