Sales of existing homes plummeted 5.1% in January, reaching their lowest level since July 2012. On Friday, The National Association of Realtors (NAR) cited the winter storms, rising home prices, and reduced inventory as contributory factors in the drop. 

Included in the existing home sales calculus are previously-owned single-family homes, townhomes, condominiums, and co-ops that are sold during a given month. The sale of existing homes is considered a bellwether because they represent far more sales than new homes.

The sale of previously owned homes declined 5.1% from December to a seasonally adjusted annual rate of 4.62 million homes. Moreover, existing home sales also fell 5.1% from January 2013. Lawrence Yun, NAR chief economist, commented in a press release that the decline in existing home sales is not too surprising: “Disruptive and prolonged winter weather patterns across the country are impacting a wide range of economic activity, and housing is no exception.” 

Yun added that it wasn’t just snowy weather and declining wind chill factors that impacted sales: “We can’t ignore the ongoing head winds of tight credit, limited inventory, higher prices and higher mortgage interest rates.” 

What’s more, Yun blames the economy and believes that the housing market won’t improve until the job market is strengthened: “These issues will hinder home sales activity until the positive factors of job growth and new supply from higher housing starts… to make an impact.”

According to NAR President Steve Brown, also adding to the declining statistics are higher flood insurance rates in flood zones. Brown asserted, “Thirty percent of transactions in flood zones were cancelled or delayed in January as a result of sharply higher flood insurance rates.”

In every region of the country in January, home sales slumped from December. Furthermore, only the South, which registered a 1.6% uptick, saw a sales increase versus January 2013. 

In one bright spot, distressed sales continue to fall. Foreclosures and short sales accounted for 15% of January’s sales as opposed to 24% in January 2013.