January saw harsh snowstorms, extreme temperatures across the U.S. and a drop in sales of previously owned homes to the lowest level in more than a year. Some have speculated that the bad weather was to blame, but economists say that it was only partially guilty.
Existing home purchases decreased 5.1 percent to a 4.62 million annual rate last month, the fewest since July 2012, according to the National Association of Realtors.
“The weather played some role, but just as much of a role was played by lower inventories, higher mortgage rates, slightly higher prices and tighter credit,” Robert Rosener, an economist at Credit Agricole CIB in New York, who correctly projected the drop in sales, told Bloomberg News. “We’re on a positive trajectory, and when the spring comes we should see a bounce back.”
Bloomberg News surveyed 79 economists and the median forecast projected that sales would drop to a 4.67 million rate, with estimates ranging from a 4.5 million pace to 4.9 million. [Bloomberg News] —Christopher Cameron