Existing-home sales fell sharply in January, dropping 8.4% month over month to a seasonally adjusted annual rate of 3.91 million, according to the National Association of REALTORS® Existing-Home Sales Report. Sales were also down 4.4% compared with a year earlier, with declines reported across every U.S. region. The report, which tracks price trends, inventory levels, and buyer activity, suggests that the housing market began the year with slower momentum than expected.
Economists note that January’s unusually harsh weather may have distorted the data. NAR Chief Economist Dr. Lawrence Yun explained that below-normal temperatures and heavy precipitation made it difficult to determine whether the slowdown reflects underlying demand or simply temporary seasonal disruption. Despite weaker sales, affordability improved for the seventh straight month, as wage growth outpaced home price increases and mortgage rates fell compared with last year.
Even as affordability improved, supply remained tight. Total housing inventory stood at 1.22 million units, down slightly from December but up modestly from a year ago, representing a 3.7-month supply. Limited inventory continued to push prices higher, with the median existing-home price rising to $396,800, marking the 31st consecutive month of annual price gains. Yun noted that homeowners remain financially strong, with a typical owner gaining about $130,500 in housing wealth since January 2020.
Regionally, all areas saw sales declines, led by the West with a 10.3% drop and the South with a 9.0% decline. Single-family home sales fell 9.0%, while condo and co-op sales dipped 2.6%. Meanwhile, market dynamics shifted slightly: homes stayed on the market longer at a median of 46 days, first-time buyers accounted for 31% of purchases, and cash sales edged down to 27%. Mortgage rates averaged 6.10% in January, lower than both December and the same month last year, offering some support for buyers despite ongoing supply constraints.