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The
National Association of Realtors said Thursday that its Pending
Home Sales Index, which is an indicator of home sales based on
contract signings, declined 4.6% to 70.6 last month. Pending
transactions fell 5.2% from the year-ago period.
There were month-over-month declines in the Midwest, South and
West, with the most significant drop in the South. Despite
stretches of high winds and low temperatures, sales in the
Northeast rose modestly.
“It is unclear if the coldest January in 25 years contributed to
fewer buyers in the market, and if so, expect greater sales
activity in upcoming months,” NAR Chief Economist Lawrence Yun
said in a statement. “However, it’s evident that elevated home
prices and higher mortgage rates strained affordability.”
Mortgage rates in January were between 6.91% and 7.04%.
On Friday NAR said that sales of previously occupied U.S. homes
slipped 4.9% last month from December to a seasonally adjusted
annual rate of 4.08 million units.
Sales rose 2% compared with January last year, marking the
fourth straight annual increase. The latest home sales, however,
fell short of the 4.11 million pace economists were expecting,
according to FactSet.
Home prices increased on an annual basis for the 19th
consecutive month. The national median sales price rose 4.8% in
January from a year earlier to $396,900.
The U.S. housing market has been in a sales slump dating back to
2022, when mortgage rates began to climb from pandemic-era lows.
Sales of previously occupied U.S. homes fell last year to their
lowest level in nearly 30 years.
Shares of publicly traded home builders have been punished this
year and those prices slipped again Thursday. Tariffs threatened
by President Donald Trump have led to rising unease in the
sector due to the possibility of higher prices for lumber and
metals. And mass deportations under the Trump administration
could also raise costs for builders.
The builder Toll Brothers is down 11% this year. D.R. Horton and
Lennar are down between 7% and 9%. Beazer homes is down nearly
17% in 2025.
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