U.S. existing-home sales declined in January, with some buyers waiting to see how details of the economic stimulus package would affect them, and inventories fell to a two-year low, the U.S. National Association of Realtors reported on Wednesday.

Existing-home sales — including single-family, townhomes, condominiums and co-ops — fell 5.3% to a seasonally adjusted annual rate of 4.49 million units in January, down from a level of 4.74 million units in December, and down 8.6% from the 4.91 million-unit pace in January 2008.

“Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” said Lawrence Yun, NAR’s chief economist. “The housing market will soon get a lift from very favourable buying conditions; not only from improved affordability, but also from the stimulus of an US$8,000 first-time homebuyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates.”

Total housing inventory at the end of January fell 2.7% to 3.6 million existing homes available for sale, which represents a 9.6-month supply at the current sales pace. Because sales were down, the January supply is up from a 9.4-month supply in December.

“The drop in total inventory is an encouraging sign because the number of homes on the market has declined steadily since peaking in July 2008, and inventory is at the lowest level in two years,” Yun said. In January 2007 there were 3.54 million homes for sale.

NAR estimates the impact of the stimulus package and lower interest rates on the housing market to be about 900,000 additional home sales in 2009 compared with conditions before the stimulus package. Inventory is expected to fall below an eight-month supply by the yearend, which would be consistent with home price stabilization.

Meanwhile, a high prevalence of distressed home sales, and of those in lower price ranges, has skewed the median price to be markedly lower than under normal market conditions. The national median existing-home price for all housing types was US$170,300 in January, down 14.8% from a year earlier when the median was US$199,800; the median is where half of the homes sold for more and half sold for less.

Yun said it will take a while for the stimulus to show in housing data. From the time a buyer starts looking for a home until it is reported as a closed sale can take as long as five months: a median of 10 weeks to search and make an offer, about six weeks to close the transaction and up to four weeks to collect and report the data. “This means improvement from the economic stimulus isn’t likely to show as closed home sales before summer, although we may see an earlier lift from lower mortgage interest rates,” he said.

Single-family home sales fell 4.7% to a seasonally adjusted annual rate of 4.05 million in January from a pace of 4.25 million in December, and down 7.1% from a 4.36-million-unit level in January 2008.

Existing condominium and co-op sales dropped 10.2% to a seasonally adjusted annual rate of 440,000 units in January from 490,000 units in December, and are 20.3% lower than the 552,000-unit level a year ago.