Feb. 21 - Sales of previously owned homes fell more than expected in January as winter storms hammered much of the country, but a shortage of inventory is also in the winter mix. Carmen Roberts reports.
TV AND WEB RESTRICTIONS~**NONE** It's a cold, cold winter for much of the U.S., and it's keeping many home buyers frozen in place. Sales of previously owned homes dipped more than expected in January to an 18-month low. Chris Rupkey, Chief Financial Economist, Bank of Tokyo Mitsubishi: SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING: "Activity is at a very low ebb at this point, but you know, it doesn't look good. If you put it up on a chart, going, looking at it November, January, uh November, December, January, I mean sales are really coming off pretty sharply. We wouldn't want to see that continue. That's about as best as I can say." The National Association of Realtors says home resales fell 5.1 percent to an annual rate of 4.6 million units. That's the lowest level since July 2012. But more than freezing temperatures are in the mix. After all, the biggest regional drop was in the West - which was the warmest. Other stumbling blocks include: tighter lending standards, higher mortgage rates, soft consumer confidence, and inventory shortages. The silver lining in this report is that home prices are up 10.7 percent compared to a year ago, with the median price at nearly $189,000. But for some sellers, that's still not enough, leading to fewer homes for sale. SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, BANK OF TOKYO-MITSUBISHI (ENGLISH) SAYING: "After prices have come off so dramatically, the sellers are kind of gun shy here. They say, 'Oh my gosh, you know my house was worth $400,000. Now they tell me it's only worth $325,000. That doesn't make any sense.' So they hold it off the market, waiting for the market to come back." As home prices rise more -- it may help boost consumer confidence and home sales. And that would inject confidence into the overall economy, which this and other housing reports indicate got off on a weak start in 2014. Economists say home resales are down, but likely not out. Spring may cause a thaw in sales leading to a possible recovery by year's end.