by Monthly index shows declines in the Midwest, South and West, with a slight increase in the Northeast
WASHINGTON — January pending home sales fell 4.6% from December 2024, reaching an all-time low of 70.6% on the monthly index published by the National Association of Realtors.
An index of 100 references the level of activity in 2001, according to the NAR.
Pending home sales offer a forward-looking glimpse of what actual home sale closings could look like in the next month or two and are based on contract signings for single-family homes, condos and co-ops. They declined in the Midwest, South and West, while the Northeast experienced a small increase.
Meanwhile, year-over-year pending home sales fell 5.2% with signed contracts declining in all four regions of the U.S.
Affordability also was an issue in January as the NAR said that mortgage rates ranged from 6.91% to 7.04%. It added that compared to January 2024, the monthly mortgage payment on a $300,000 home rose by $50 to $1,590.
“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,” said Lawrence Yun, NAR chief economist. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”
The next existing home sales report reflecting home sales activity in February is scheduled to be released March 20. What those numbers look like will depend on any number of factors, Yun noted.
“Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices,” he said.
By region, the month-over-month and year-over-year activity is as follows:
+ The Northeast PHSI rose 0.3% from December to 63.4, but down 0.5% from January 2024.
+ The Midwest index contracted 2% to 72.8 from December and also was down 2.7% from January 2024.
+ The South saw the largest decrease as the PHSI plunged 9.2% to 81.0 in January from December and also was down 8.8% from a year ago.
+ The West index fell by 1.2% from the prior month to 57.6 and also was down 4.5% from January 2024.
