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The National Association of Realtors (NAR) reports that the seasonally adjusted annual rate of existing home sales in January declined by 3.2% to 5.38 million from a downwardly revised total of 5.56 million in December.

The January decline was the largest in over three years. The consensus estimate called for sales to reach 5.65 million, according to a survey of economists polled by Bloomberg.

In 2017 existing-home sales rose 1.1% year over year, the best level in 11 years. The seasonally adjusted annual rate came in at 5.51 million, the highest since posting 6.48 million in 2006.

The NAR’s chief economist, Lawrence Yun, said:

The utter lack of sufficient housing supply and its influence on higher home prices muted overall sales activity in much of the U.S. last month. While the good news is that Realtors® in most areas are saying buyer traffic is even stronger than the beginning of last year, sales failed to follow course and far lagged last January’s pace. 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. …

However, there’s hope that the tide is finally turning. There was a nice jump in new home construction in January and homebuilder confidence is high. These two factors will hopefully lay the foundation for the building industry to meaningfully ramp up production as this year progresses.

Housing inventory increased by 4.1% in January to 1.52 million homes, equal to a supply of 3.4 months, down from 3.6 months in January 2017, and has fallen year over year for 32 consecutive months. Inventory is down 9.5% year over year from 1.68 million in January 2017.

According to the NAR, the national median existing-home price for all housing types in January was $240,500, up 5.8% compared with December 2016, the 71st consecutive month of rising home prices. In December the national median price was $246,800.

The percentage of first-time buyers fell by three points year over year in January to 29%. For all of 2017, first-time buyers accounted for 34% of sales, down one percentage point compared with 2016.

Sales of single-family homes fell 3.8% from the December total of 4.95 million to a seasonally adjusted annual rate of 4.76 million, and that was down 4.8% compared with January 2017. Sales of multifamily homes increased by 1.6% in January to a seasonally adjusted annual rate of 620,000 units.

All homes were on the market for an average of 42 days in January, two days more, month over month, and down from 50 days in January 2017. Foreclosure (4%) and short (1%) sales accounted for 5% of all January sales, flat compared with the prior month and down from 7% in January 2017.

The NAR also reported the following regional data.

January existing-home sales in the Northeast dipped 1.4% to an annual rate of 730,000, compared with December, and are down 7.6% compared with January 2017 sales. The median price in the Northeast was $269,100, up 6.8% compared with January of last year.

In the Midwest, existing-home sales fell 6% to an annual rate of 1.25 million in January and were 3.8% below the January 2017 rate. The median price in the Midwest was $188,000, or 8.7% higher than a year ago.

Existing-home sales in the South slipped 1.3% in January to an annual rate of 2.26 million and are now 1.7% below January 2017 sales. The median price in the South was $208,200, up 4.3% from a year ago.

Existing-home sales in the West dropped 5% to an annual rate of 1.14 million in January. That is down 9.5% compared with January 2017 totals. The median price in the West was $362,600, up 8.8% compared with the January 2017 median.

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