Pending Home Sales Dip in January
What happened
Pending home sales decreased by 0.8% in January compared to the previous month, according to a new report from the National Association of REALTORS®. On a year-over-year basis, sales under contract were down 0.4%, signaling a slight contraction in market activity at the start of the year.
Why it matters
- The January Pending Home Sales Index (PHSI) registered at 70.9, a figure that was contrary to economists' expectations of a 2.5% increase. This represents the lowest level for the index in its recorded history. - Regional performance varied significantly across the country. Sales surged by 5.0% in the Midwest and 4.3% in the West on a month-over-month basis. Conversely, the Northeast saw a 5.7% decrease, and the South experienced a 4.5% drop. - NAR Chief Economist Lawrence Yun noted that while improving affordability from mortgage rates nearing 6% has theoretically qualified an additional 5.5 million households for a mortgage, this has not yet translated into increased buying activity. - Several factors are believed to have influenced the January numbers, including ongoing economic uncertainty, low housing inventory, and severe winter weather that occurred during the month. - Housing inventory remains a significant constraint on the market. The available supply of homes for sale was measured at 1.22 million in January, which equates to a 3.7-month supply, the lowest since February 2025. - The Pending Home Sales Index is a forward-looking indicator, with contract signings typically preceding closed sales by one to two months, suggesting a potential for continued softness in existing-home sales in the near term. - Despite the national decrease, several large metropolitan areas posted notable year-over-year gains in pending sales, including Phoenix (+11.8%), Boston (+10.7%), and Charlotte (+10.7%).
Key numbers
- Pending home sales decreased by 0.8% in January compared to the previous month, according to a new report from the National Association of REALTORS®.
- On a year-over-year basis, sales under contract were down 0.4%, signaling a slight contraction in market activity at the start of the year.
- - The January Pending Home Sales Index (PHSI) registered at 70.9, a figure that was contrary to economists' expectations of a 2.5% increase.
- Sales surged by 5.0% in the Midwest and 4.3% in the West on a month-over-month basis.
Quick answers
What happened in Pending Home Sales Dip in January?
Pending home sales decreased by 0.8% in January compared to the previous month, according to a new report from the National Association of REALTORS®. On a year-over-year basis, sales under contract were down 0.4%, signaling a slight contraction in market activity at the start of the year.
Why does Pending Home Sales Dip in January matter?
The January Pending Home Sales Index (PHSI) registered at 70.9, a figure that was contrary to economists' expectations of a 2.5% increase. This represents the lowest level for the index in its recorded history. Regional performance varied significantly across the country. Sales surged by 5.0% in the Midwest and 4.3% in the West on a month-over-month basis. Conversely, the Northeast saw a 5.7% decrease, and the South experienced a 4.5% drop. NAR Chief Economist Lawrence Yun noted that while improving affordability from mortgage rates nearing 6% has theoretically qualified an additional 5.5 million households for a mortgage, this has not yet translated into increased buying activity. Several factors are believed to have influenced the January numbers, including ongoing economic uncertainty, low housing inventory, and severe winter weather that occurred during the month. Housing inventory remains a significant constraint on the market. The available supply of homes for sale was measured at 1.22 million in January, which equates to a 3.7-month supply, the lowest since February 2025. The Pending Home Sales Index is a forward-looking indicator, with contract signings typically preceding closed sales by one to two months, suggesting a potential for continued softness in existing-home sales in the near term. Despite the national decrease, several large metropolitan areas posted notable year-over-year gains in pending sales, including Phoenix (+11.8%), Boston (+10.7%), and Charlotte (+10.7%).
