WASHINGTON: US existing home sales dropped to a more than 12-year low in January, but the pace of decline slowed, raising cautious optimism that the housing market slump could be close to reaching a bottom.

Existing home sales fell 0.7% to a seasonally adjusted annual rate of 4.00 million units last month, the lowest level since October 2010, the National Association of Realtors said on Tuesday. That marked the 12th straight monthly decline in sales, the longest such stretch since 1999.

Sales fell in the Northeast and Midwest, but rose in the South and West. Economists polled by Reuters had forecast home sales rising to a rate of 4.10 million units.

Home resales, which account for a big chunk of US housing sales, plunged 36.9% on a year-on-year basis in January.

“Home sales are bottoming out,” said NAR chief economist Lawrence Yun.

The housing market has been the biggest casualty of the Federal Reserve’s aggressive interest rate hiking campaign. Residential investment has contracted for seven straight quarters, the longest such stretch since 2009.

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But the worst is probably over. Homebuilders sentiment rose to a five-month high in February, though still depressed. It will, however, be a while before the housing market turns around. Government data last week showed single-family homebuilding and permits for future home construction declining in January.

Mortgage rates are rising again, with the 30-year fixed mortgage rate increasing to an average 6.32% last week from 6.12% the prior week, according to data from mortgage finance agency Freddie Mac. The second straight weekly increase reflected a spike in bond yields after recent strong data on retail sales and inflation raised fears that the Fed could continue raising interest rates through summer.

The median existing house price increased 1.3% from a year earlier to $359,000 in January. There were 980,000 previously owned homes on the market, up 2.1% from December and 15.3% from a year ago.

At January’s sales pace, it would take 2.9 months to exhaust the current inventory of existing homes up from 1.6 months a year ago. A four-to-seven-month supply is viewed as a healthy balance between supply and demand.

Properties typically remained on the market for 33 days last month, up from 26 days in December. Fifty-four percent of homes sold in January were on the market for less than a month.

First-time buyers accounted for 31% of sales, up from 27% a year ago. All-cash sales made up 29% of transactions compared to 27% a year ago.