Pending home sales fell 4.6% in January compared with December and were down 5.2% compared with January 2024, according to the National Association of Realtors (NAR).
It was the second straight month that pending home sales dropped, after increasing in September, October and November.
Month-over-month, contract signings retreated in the Midwest, South and West, while the Northeast saw a slight increase.
Year-over-year, contract signings decreased in all four U.S. regions, with the South showing the largest reduction.
“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,” says Lawrence Yun, chief economist for NAR, in a statement. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”
Mortgage rates ranged from 6.91% to 7.04% during January, according to NAR.
Compared to one year ago, the monthly mortgage payment on a $300,000 home increased by an extra $50 to $1,590.
“Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices,” Yun says.
Photo: Gabrielle Henderson