US Existing-Home Sales Fall 8.4%
What happened
The National Association of Realtors reported that existing-home sales in the U.S. decreased by 8.4% in January. Despite the sales decline, the report noted that housing affordability improved for the seventh consecutive month.
Why it matters
- The seasonally adjusted annual rate of sales was 3.91 million units, which fell short of economists' projections of 4.16 to 4.20 million. - This was the most significant drop in existing-home sales in nearly four years and the slowest sales pace since September 2024. - Despite the slowdown in sales, the median existing-home price rose 0.9% from the previous year to $396,800, a new record high for the month of January. - Total housing inventory stood at 1.22 million units, representing a 3.7-month supply at the current sales pace; a supply of 4 to 6 months is generally considered a balanced market. - NAR Chief Economist Dr. Lawrence Yun suggested that unusually cold temperatures and high precipitation in January may have been a contributing factor to the disappointing sales numbers. - The improvement in affordability was driven by wage gains outpacing the growth of home prices and by mortgage rates being lower than they were a year prior. - According to Freddie Mac, the average 30-year fixed-rate mortgage was 6.10% in January, which was its lowest level in more than a year. - Looking ahead, some economists predict that home sales could increase by about 14% nationwide in 2026, with home prices moderating to a growth rate of roughly 2% to 3%.
Key numbers
- - The seasonally adjusted annual rate of sales was 3.91 million units, which fell short of economists' projections of 4.16 to 4.20 million.
- This was the most significant drop in existing-home sales in nearly four years and the slowest sales pace since September 2024.
- Despite the slowdown in sales, the median existing-home price rose 0.9% from the previous year to $396,800, a new record high for the month of January.
- Total housing inventory stood at 1.22 million units, representing a 3.7-month supply at the current sales pace; a supply of 4 to 6 months is generally considered a balanced market.
What happens next
- Lawrence Yun suggested that unusually cold temperatures and high precipitation in January may have been a contributing factor to the disappointing sales numbers.
- Looking ahead, some economists predict that home sales could increase by about 14% nationwide in 2026, with home prices moderating to a growth rate of roughly 2% to 3%.
Quick answers
What happened in US Existing-Home Sales Fall 8.4%?
The National Association of Realtors reported that existing-home sales in the U.S. decreased by 8.4% in January. Despite the sales decline, the report noted that housing affordability improved for the seventh consecutive month.
Why does US Existing-Home Sales Fall 8.4% matter?
The seasonally adjusted annual rate of sales was 3.91 million units, which fell short of economists' projections of 4.16 to 4.20 million. This was the most significant drop in existing-home sales in nearly four years and the slowest sales pace since September 2024. Despite the slowdown in sales, the median existing-home price rose 0.9% from the previous year to $396,800, a new record high for the month of January. Total housing inventory stood at 1.22 million units, representing a 3.7-month supply at the current sales pace; a supply of 4 to 6 months is generally considered a balanced market. NAR Chief Economist Dr. Lawrence Yun suggested that unusually cold temperatures and high precipitation in January may have been a contributing factor to the disappointing sales numbers. The improvement in affordability was driven by wage gains outpacing the growth of home prices and by mortgage rates being lower than they were a year prior. According to Freddie Mac, the average 30-year fixed-rate mortgage was 6.10% in January, which was its lowest level in more than a year. Looking ahead, some economists predict that home sales could increase by about 14% nationwide in 2026, with home prices moderating to a growth rate of roughly 2% to 3%.
