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Washington – 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.

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.

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