Existing-home sales rose 0.4 percent month to month to a seasonally adjusted annual rate of 4.92 million from a downwardly revised annual rate of 4.9 million in December.
Sales for the month were 9.1 percent above the 4.51 million annual rate from January 2012, the National Association of Realtors said.
"Buyer traffic is continuing to pick up, while seller traffic is holding steady," said NAR Chief Economist Lawrence Yun.
"In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We've transitioned into a seller's market in much of the country," Yun said.
The median sales price for existing homes rose on an annual basis for the 11th consecutive month -- the longest streak since July 2005 to May 2006, the association said.
The median price of $173,600 is 12.3 percent higher than in January 2012, the trade group said.
The total inventory of existing homes on the market fell 4.9 percent from December to 1.74 million, a 4.2-month supply at the current rate of sales.
The supply of homes for sale is the lowest it has been since April 2005, when homes on the market were also calculated to be a 4.2-month supply.
Yun said the inventory of homes for sale would likely rise in the spring, as it usually does. However, "it may be insufficient to avoid more frequent incidences of multiple bidding and faster-than-normal price growth," he said.