Existing Home Sales Hit Lowest Rate Since July 2012

U.S. home resales fell more than expected in January and hit an 18 month-low as the combination of cold weather and a lack of housing stock sidelined potential buyers.

The National Association of Realtors said on Friday home sales dropped 5.1 percent to an annual rate of 4.62 million units, the lowest level since July 2012. December's sales pace was unrevised at 4.87 million.

Economists polled by Reuters had expected sales to fall to a 4.68-million pace last month. Existing home sales are counted at the closing of contracts. January's sales mostly reflected contracts signed in December.

With temperatures remaining chilly in January, February sales will probably be weak.

Sales tumbled in the Northeast, South and Midwest, which were hit by snow storms and ice last month. They were down 7.3 percent in the West, an indication that other factors apart from the weather weighed down on sales.

Fundamentals in the sector have weakened somewhat. Mortgage rates have risen and the increase in house prices has far outpaced income growth, making home buying unaffordable.

In addition, there has been a shortage of homes for sale on the market. Home resales have declined in five of the last six months, having peaked in July.

Home sales were down 5.1 percent in January from a year-ago.