Home sales plunge despite affordability improving

Driving the news: Existing home sales fell 8.4% from December to January, the National Association of Realtors reported Thursday.

• Economists had expected a 4.6% monthly drop, according to WSJ data.
• Sales were down 4.4% from a year earlier, hitting a seasonally adjusted annual rate of 3.91 million.

Zoom in: The decline was most acute for single-family homes, where sales fell 9%. Regionally, the West was down 10.3%, the South 9% and the Midwest 7.1%, while the Northeast rose 5.9%.

Between the lines: The decline came despite NAR's data showing that housing is the most affordable it's been since March 2022.

• "This is due to wage gains outpacing home price growth and mortgage rates being lower than a year ago," NAR chief economist Lawrence Yun said in a statement. "However, supply has not kept pace and remains quite low."
• Cold, snowy weather might've played a role in suppressing home sales in January, Yun noted.
• Economic jitters may be playing a part too. "Potential buyers are "still struggling," Yun said on a call with reporters, per CNBC.

The bottom line: Despite declining sales, median prices rose for the 31st straight month, rising 0.9% from a year ago to $396,800.