(Bloomberg) — Broad-based price increases put more properties out of reach for American homebuyers in January, becoming the latest hurdle preventing a more robust recovery in residential real estate.
Purchases of existing houses dropped 4.9 percent from December to a 4.82 million annualized rate, the least since April, figures from the National Association of Realtors showed Monday in Washington. The median cost of a previously owned home climbed 6.2 percent compared with January 2014 as the number of dwellings on the market dropped.
While rising property values boost homeowner wealth and spending power, too-rapid increases are outstripping wage gains, representing a hurdle for young or first-time buyers. Nonetheless, strengthening employment, historically low mortgage rates, more expensive rents and easier financing will probably sustain demand and give sales a boost this year over last.
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