Wedoany.com Report-Feb 28, The National Association of Realtors reported that pending sales of existing homes in the United States dropped to a historic low in January, reaching a gauge of 70.6, the lowest since tracking began in 2001. This figure reflects a 4.6% decline from the previous month, surpassing the expectations of economists surveyed by Bloomberg, who had predicted a 0.9% decrease. The downturn coincided with harsh winter weather across parts of the country, alongside high home prices and elevated mortgage rates, which have deterred buyers ahead of the key spring season.
Rows of single family homes in a suburban neighborhood in San Marcos, Texas, US, on Tuesday, March 12, 2024.
The South, the nation’s largest home-selling region, saw the most significant reduction, with contract signings falling 9.2%, the steepest decline since the onset of the Covid-19 pandemic. Historic snowfall affected portions of this area, potentially contributing to the slowdown. NAR Chief Economist Lawrence Yun noted: “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.” He also highlighted that rising home prices and mortgage rates near 7% have made affordability a persistent challenge for prospective purchasers.
Nationwide, the median sale price for a previously owned home reached $396,900 in January, according to NAR data, marking a 49% increase over the past five years. Separate figures from S&P CoreLogic Case-Shiller showed national home prices climbed 3.9% in December compared to the same month a year earlier, up slightly from a 3.7% annual rise in November. These trends underscore ongoing pressure on buyers, even as the market cools.
Regionally, the Midwest and West experienced smaller drops in contract signings, while the Northeast recorded a modest uptick in January. Pending sales, which typically signal closings one to two months later, serve as an early measure of activity in the existing-home market. The January slump follows a separate NAR report from the prior week, indicating that completed existing-home sales dipped last month, ending a streak of gains since September.
The broader housing landscape has shown signs of softening in recent weeks, despite a brief boost following the November presidential election. High mortgage rates, hovering around 7%, have lingered, dampening buyer enthusiasm. Severe weather may have played a role in January’s decline, though its full impact remains uncertain. As spring approaches, market watchers will look for signs of recovery, though affordability concerns tied to pricing and borrowing costs continue to shape the outlook for US home sales.
