The drop in sales comes after the longest stretch of gains since late 2021, which offered some hope that home buyers and sellers were getting used to high mortgage rates. Home financing costs have been hovering around 7% for a few months, and combined with elevated prices, buying a house remains out of reach for many Americans.

Existing home sales began the year with their first decline in four months. According to the National Association of Realtors (NAR), sales retreated 4.9% from December to a seasonally adjusted annual rate of 4.08 million units in January, the largest monthly drop since November 2022. The latest reading came in below the expected 4.13 million.