Home sales drop in January; GDP growth rate beats estimates

HomeAccording to the National Association of Realtors’ Friday report, the sales of previously-owned houses in the US witnessed an unexpected decline in January – marking the second monthly fall in a row; following a 16 percent plunge in December.

While the analysts were expecting the sales to increase marginally in January, the report about a decline in the sales is a rather disquieting one – implicitly hinting that the potential recovery of the housing market may not be as easy as it earlier appeared.

Going by the statistics forwarded by the National Association of Realtors, sales of existing houses, townhouses, condominiums and cooperatives dropped 7.2 percent, to a seasonally-adjusted annual rate of 5.05 million, in January vis-à-vis the December numbers.

Despite the fact that the home sales for January are 11.5 percent higher than the last year figures, the association’s chief economist, Lawrence Yun, said in a recent statement that the monthly trend was “not encouraging.”

The association expects the home sales’ figures to turnaround for the better in spring this year – particularly as an increasing number of first-time home buyers will likely benefit from a recently-renewed tax credit.

Meanwhile, the disappointing January home sales figures have been counterbalanced, to some extent, by a government report showing that the gross domestic product increased at a 5.9 percent annual rate during the October-December period; thereby beating the Commerce Department estimates of a 5.7 percent growth rate.