Existing-home sales slowed 8.4% in January from December, falling to a seasonally adjusted annual rate of 3.91 million, according to the National Association of Realtors (NAR) Existing-Home Sales Report. Sales were down 4.4% compared to one year ago, with declines across every region. While notable, January’s harsh winter weather—including below-normal temperatures and above-normal precipitation—may have skewed activity. As Lawrence Yun, chief economist for NAR, said, “The decrease in sales is disappointing. This January’s below-normal temperatures and above-normal precipitation make it harder to assess the underlying driver and determine if the numbers are an aberration.”

Affordability Improves for the Seventh Straight Month

Despite softer sales, affordability strengthened again. The NAR Housing Affordability Index rose to 116.5 in January, up from 102 a year earlier—the most favorable reading since March 2022. Yun noted, “Affordability conditions are improving. Housing is the most affordable it’s been since March 2022 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.”

Prices Hold Firm as Supply Remains Limited

The median existing-home price reached $396,800 in January, up 0.9% year over year and marking the 31st consecutive month of annual price gains—and a new January high. Yun added, “Due to low supply, the median home price reached a new high for the month of January. Homeowners are in a financially comfortable position as a result. Since January 2020, a typical homeowner would have accumulated $130,500 in housing wealth.”

Inventory Edges Lower, Market Slows Seasonally

Housing inventory slipped 0.8% to 1.22 million units, representing a 3.7-month supply—slightly higher than one year ago but still historically tight. Homes spent a median of 46 days on the market, up from 39 days in December, reflecting a typical seasonal slowdown. First-time buyers accounted for 31% of purchases, while investor activity eased, signaling that primary buyers are gradually regaining ground as affordability improves.

Looking Ahead

January reflects adjustment, not distress. Sales cooled, partly due to weather, but affordability continues to improve and mortgage rates have dropped below 6%. With wages rising faster than home prices and spring inventory expected to increase, the coming months should offer clearer direction. For buyers, conditions are becoming more manageable. For sellers, limited supply and steady prices still create opportunity—especially with strategic pricing and thoughtful preparation.

Regional Sales Snapshot 

• Northeast: 480,000 existing-home sales (-5.9% MoM, -4% YoY) | Median Price: $505,400 (+5.8%)

• Midwest: 920,000 existing-home sales (-7.1% MoM, -7.1% YoY) | Median Price: $295,400 (+2.3%)

• South: 1.81 million existing-home sales (-9% MoM, -1.6% YoY) | Median Price: $351,200 (+0.1%)

• West: 700,000 existing-home sales (-10.3% MoM, -7.9% YoY) | Median Price: $600,400 (-1.4%)