U.S. existing home sales hit a 2-year low in January, dropping 8.4% to 3.91 million units, the lowest since December 2023. Sales declined 4.4% year-over-year, with falling inventory driving up prices. Affordability conditions are improving, but supply remains low, according to NAR’s chief economist Lawrence Yun.

The NAR’s housing affordability index rose to 116.5 in January, the highest since March 2022, driven by improved wage gains and lower mortgage rates. Mortgage rates have decreased due to FHFA buying bonds from Fannie Mae and Freddie Mac. Inventory of existing homes fell 0.8% to 1.22 million units.

The median existing home price in January was $396,800, up 0.9% from a year ago, the highest for any January. First-time buyers accounted for 31% of sales, up from 28% a year ago. All-cash sales constituted 27% of transactions, down from 29% a year ago. Distressed sales made up 2% of transactions.

Read more at Yahoo Finance: US existing home sales drop to more than two-year low in January