Pending home sales in the United States slid to an all-time low in January as high mortgage rates, record-high home prices, and possibly the terrible weather last month hindered those seeking to buy.
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.