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Existing home sales fall
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February 25, 2000: 10:44 a.m. ET
January sales decline 10.7% to 4.59-million rate, lowest in three years
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NEW YORK (CNNfn) - U.S. sales of existing homes declined in January to the lowest level in more than three years, a real estate group reported Friday, as winter storms in the northeastern part of the country and rising mortgage rates deterred potential buyers from signing on the dotted line.
Sales of existing homes fell 10.7 percent in January to a 4.59 million rate, the National Association of Realtors said, more than the 4.1 percent drop analysts had expected. From a year earlier, sales declined 10 percent, the Washington-based real estate group said.
Winter storms that kept many people indoors during January, along with rising mortgage rates, were both factors in the steeper-than-expected drop, Diane Swonk, chief strategist with Bank One, told CNNfn. Because of that, a rebound in existing home sales will likely appear in February, she said.
"I think you have to take the January numbers with a bit of a grain of salt," Swonk said. "Consumer confidence is still quite strong and I think we'll see at least a partial recovery in activity in February and through the spring."
NAR President Dennis Cronk also pointed to a lack of supply as reason for the decline in sales. "The real problem is supply," he said. "There simply aren't enough homes for sale in many parts of the United States."
At the end of January, there were 1.15 million existing homes available for sale across the country, representing a three-month supply at January's pace of sales -- a record-low level of inventory.
On a regional basis, sales in the West slid 22.4 percent to a pace of 1.04 million units, while sales in the Midwest fell 8 percent to a pace of 1.03 million units. Sales in the South fell 1.5 percent to a rate of 1.94 million units, while sales in the Northeast, hit by winter storms, slipped 6.5 percent to a rate of 580,000 units. 
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