Existing-home sales experienced a notable decline of 8.4% in January, marking a challenging start to the year for the housing market. This downturn was observed across all regions, both month-over-month and year-over-year. Despite the drop in sales volume, a silver lining emerged as housing affordability improved for the seventh consecutive month, offering some relief to prospective buyers.
Key Takeaways
- Existing-home sales fell by 8.4% in January.
- Affordability improved across all regions for the seventh consecutive month.
- The median existing-home price saw a slight annual increase.
- Inventory levels increased, providing a larger supply of unsold homes.
- Mortgage rates continued to trend lower than the previous year.
Regional Performance and Affordability Gains
While sales activity slowed across the board, affordability metrics showed positive trends. The national Housing Affordability Index rose to 116.5 in January, up from 111.6 in December and 102 a year prior. This improvement was driven by wage growth outpacing home price increases and a decrease in mortgage rates compared to last year. The average 30-year fixed mortgage rate stood at 6.10% in January, down from 6.19% in December and significantly lower than 6.96% in January 2025.
Affordability saw year-over-year gains in all regions:
- Northeast: +9%
- Midwest: +12.2%
- South: +15.2%
- West: +17.1%
Sales Volume and Inventory
In January, 1.22 million existing homes were sold. This figure represents a 0.8% decrease from December and a 3.4% increase from January 2025. The supply of unsold inventory also saw an uptick, reaching a 3.7-month supply, up from 3.5 months in December and the previous year. This increase in inventory, while still considered low, could potentially ease some of the pressure on buyers.
Median Home Prices Remain Resilient
The median price for existing homes was $396,800 in January, reflecting a modest 0.9% increase from the previous year. This marks the 31st consecutive month of year-over-year price appreciation. Single-family homes followed a similar trend, with sales down 9.0% month-over-month to an annual rate of 3.54 million, but the median price rose 0.6% year-over-year to $400,300.
Regional Price Variations
Price trends varied by region. The Northeast experienced the strongest annual price growth, with the median price climbing 5.8% to $505,400. The Midwest saw a 2.3% increase to $295,400, while the South remained relatively stable with a 0.1% rise to $351,200. The West was the only region to record a year-over-year price decrease, with the median price falling 1.4% to $600,400.
NAR Chief Economist Lawrence Yun commented on the market conditions, noting that while the decrease in sales is disappointing, the improving affordability is a positive sign. He highlighted that low supply continues to be a factor contributing to price resilience, with homeowners accumulating significant wealth over the past few years.