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US home sales tumbled 1.2 percent in January

U.S. home sales fell 1.2 percent in January to their worst pace in more than three years, as persistent affordability problems have put a harsh chill in the real estate market.

The National Association of Realtors said Thursday that sales of existing homes declined 1.2 percent to a seasonally adjusted annual rate of 4.94 million last month, the slowest sales rate since November 2015.

During the past 12 months, sales have plunged 8.5 percent. Would-be homebuyers are increasingly priced out of the market as years of climbing prices and strained inventories have made ownership too costly. A solid job market has done little to boost sales, with the sharpest annual sales declines being among homes priced less than $250,000.

FILE- In this Jan. 14, 2019, file photo a sold sign outside a home in Mt. Lebanon, Pa. On Thursday, Feb. 21, the National Association of Realtors reports on sales of existing homes in January. (AP PhotoGene J. Puskar, File)

Still, buyers may find some relief as average mortgage rates have declined this year and price growth has slowed. The median sales price in January was $247,500, a slight increase of 2.8 percent from last year. After eclipsing wage gains for several years, home prices in this report are now increasing at a slower rate than average hourly earnings.

On a monthly basis, home sales fell in the Midwest, South and West. Sales increased in the Northeast.