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.
- 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%.
