Contract closings fell 3.2 percent, while the median sales price increased 5.8 percent to $240,500.
The decline was driven by a sharp drop in single-family home sales in the West - arguably the country's most supply-constrained region - and in the Midwest.
The median seasonally adjusted price of existing homes sold in January surged to a new all-time record, increasing by 1.8 percent to $255,500, up 5.7 percent over the year.
In Northeast Ohio, January sales were down 1.5 percent from a year before, based on data compiled earlier this month by the Northern Ohio Regional Multiple Listing Service.
Inventory eased, increasing 2.3 percent from December to 1.72 million units (SAAR) but remained down 9.5 percent from a year ago. The year-over-year measure has fallen 32 months, according to NAR. That's 3.4 months of supply at the current pace, down from 3.6 months a year earlier.
Sales of previously owned, or existing, homes slumped last month. "While the good news is that Realtors in most areas are saying buyer traffic is even stronger than the beginning of previous year, sales failed to follow course and far lagged last January's pace".
"Another month of solid price gains underlines this ongoing trend of strong demand and weak supply", Yun said.More news: Dozens of girls missing after extremists attack Nigerian village
First-time buyers made up 29 percent of all sales, compared with 33 percent a year earlier. The average rate for a year ago was 3.99 percent.
Properties typically stayed on the market for 42 days in January, which is up from 40 days in December 2017 but down from a year ago (50 days). "However, there's hope that the tide is finally turning".
Yun said January saw a jump in new home construction, and growing homebuilder confidence. "These two factors will hopefully lay the foundation for the building industry to meaningfully ramp up production as this year progresses".
The metropolitan areas with the fewest days on market and most realtor.com® views in January, according to realtor.com's Market Hotness Index, were San Francisco-Oakland-Hayward, Calif., San Jose-Sunnyvale-Santa Clara, Calif., Vallejo-Fairfield, Calif., Midland, Texas, and Colorado Springs, Colo.
"I still think we will see the job market and demographics overcome the rise in mortgage rates and give some upward movement in home sales, but much less than in the past because the number of homes for sale is so small", Mr. Berson said.
But limited inventory on the market is driving up home prices at a rapid pace, potentially blocking some would-be buyers. A six- or seven-month supply is viewed as a healthy balance between supply and demand.