Existing home sales drop 8.4% in January as winter weather slows market

The pace of existing home sales slowed down dramatically in January as much of the nation experienced frigid temperatures and faced historic snowfall, according to data released Thursday by the National Association of Realtors (NAR). In January, the pace of existing home sales dropped to a seasonally adjusted annual rate of 3.91 million homes, down 8.4% month-over-month and 4.4% annually.

“The decrease in sales is disappointing. The below-normal temperatures and above-normal precipitation this January make it harder than usual to assess the underlying driver of the decrease and determine if this month’s numbers are an aberration,” Lawrence Yun, the NAR’s chief economist, said in a statement.

While she acknowledged the weather’s role in the January data, Lisa Sturtevant, the chief economist at Bright MLS, attributed some of the slow down to a decrease in pending home sales in December.

“Many buyers stayed on the sidelines, waiting not just for lower rates but also rate stability,” Sturtevant said in a statement. “Therefore, the January closed sales numbers are really reflecting conditions buyers encountered during December.”

In addition to the sales pace decreasing, the inventory of unsold homes also fell on a monthly basis, dropping 0.8% from December to 1.22 million unsold units, which represents 3.7 months’ supply at the current sales pace. Despite the drop from a month prior, the inventory of unsold existing homes is up 3.4% compared to a year ago.

The report also noted that the median sales price rose 0.9% year-over-year to $396,800, marking the 31st consecutive month of annual price increases.

“Due to low supply, the median home price reached a new high for the month of January,” Yun added. “Homeowners are in a financially comfortable position as a result. Since January 2020, a typical homeowner would have accumulated $130,500 in housing wealth.”

Regionally, the pace of existing home sales rose month-over-month in the Northeast (5.9%) to an annual pace of 480,000 units, but fell 7.1% in the Midwest (920,000 units), 9.0% in the South (1.81 million units) and 10.3% in the West (700,000 units). Year-over-year, the sales pace dropped in all four regions with the West dropping the most at 7.9% and the South recording the smallest decrease at 1.6%

“Buyers will find a more favorable market as we head into spring. More inventory, lower rates and slower price growth will give buyers more room for negotiation. Snowy weather in January could have delayed buyers a bit, but it is likely we will see more home shoppers out early this spring,” Sturtevant said. “Market conditions will vary depending on what part of the country you are in. There will likely be more sales in the Southeast and Southwest where inventory has climbed, while tight supply will continue to be a constraint on home sales in some Midwestern and Northeastern markets.”

NAR also reported its Housing Affordability Index, which rose 116.5, up from 111.6 in December 2025 and 102.0 a year ago. According to NAR, this marks the seventh consecutive month of housing affordability improvement. This increase comes as affordability rose in all four major regions, improving by 9% in the Northeast, 12.2% in the Midwest, 15.2% in the South and 17.1% in the West.

“Affordability conditions are improving, with NAR’s Housing Affordability Index showing that housing is the most affordable it’s been since March 2022. This is due to wage gains outpacing home price growth and mortgage rates being lower than a year ago. However, supply has not kept pace and remains quite low,” Yun said.

Additionally, NAR’s Realtor Confidence Index, also released Thursday, found that the median time on market for properties in January was 46 days, up from 39 days last month and 41 days a year ago. On a positive note, the share of first-time homebuyers ticked up slightly to 31%, up from 29% in December and 28% in January 2025.

Reflecting this, the share of all cash transactions declined slightly in January to 27%, down from 28% a month ago and 29% in January 2025. Similarly, the share of individual investors or second-home buyers also declined, dropping to 16%, down from 18% in December and 17% a year ago.