US homebuyers started the year by slamming on the brakes. Sales of existing homes fell 8.4% in January from December, to an annual rate of 3.91 million, according to the National Association of Realtors—far weaker than economists expected and the slowest pace since late 2023, CNBC reports. Compared with a year earlier, sales were down 4.4%, marking the steepest monthly decline since early 2022. NAR chief economist Lawrence Yun labeled the situation "a new housing crisis," saying, "Americans are stuck."
The downturn comes even as borrowing costs have eased somewhat: the average 30-year fixed mortgage rate is about 6.1%, and NAR's affordability index shows conditions are the best since March 2022, helped by wages rising faster than home prices. But Yun said buyers are "still struggling," especially renters, whom he noted are "not participating in housing wealth." Sales fell in every major region, with the sharpest pullbacks in the South and West. Snowstorms and low consumer confidence played a part in halting the momentum that home sales had been gaining, the Wall Street Journal reports.
Inventory remains a key choke point. The supply of homes for sale dipped from December but was up 3.4% from a year earlier, at 1.22 million properties—enough to last 3.7 months at the current sales pace. A roughly six-month supply is considered a balanced market. The tight conditions helped keep prices climbing in some markets: the median existing-home price in January was $396,800, up 0.9% year-on-year and the highest January figure on record. But with buyers able to become more picky, homes are sitting on the market for longer and many buyers have been able to negotiate discounts, the Journal reports. According to Redfin, almost two-thirds of buyers last year paid less than the original listing price.
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