Home sales pending in January drop to the lowest level on record

In January, the heightened home prices combined with rising home prices shattered home sales.

Pending sales under signature agreements for existing homes have fallen by 4.6% to the lowest level since December, since the National Association of Realtors began tracking the indicator in 2001. Sales fell 5.2% from January 2024. These sales are indicators of future closures.

“It is unclear whether January of 25, the coldest month of 2015, contributed to a fewer buyers’ contributions in the market. If so, we look forward to greater sales activities in the coming months,” said Lawrence Yun, chief economist at NAR. “But it is clear that the rising prices of homes and rising mortgage rates have left affordable prices nervous.”

Although weather may have been a factor, sales rose monthly in the northeast and fell in the west. Sales fell the most in the South. This has been the most active area for home sales in recent years.

Mortgage fees were also high in January. The average rate for popular 30-year fixed loans spent under 7% in the first half of December, but then began to rise. According to Mortgage News Daily, it was firmly above 7% in all of January.

In certain regions, home prices have been eased over the past few months, with more sellers increasing and prices lowering, but nationwide is still higher than a year ago.

This decline in sales also occurred despite the fact that inventory in homes that are under contract and not yet sold increased by 17% compared to last year, and 17% compared to last year, according to Realtor.com.

“More sales inventory could generate more contract signatures, but it’s not evenly distributed to climbers,” says Daniel Hale, Chief Economist at Realtor.com. “Many areas in high demand are seeing relatively low sales inventory, limiting progress towards more home sales.”