NAR: Pending Home Sales Drop 4.6% in January; Index at All-Time Low

(Image courtesy of NAR)

The National Association of Realtors, Chicago, reported pending home sales in January from December dropped 4.6%.

Year-over-year, pending transactions declined 5.2%.

The NAR Pending Home Sales Index, which it defines as a forward-looking indicator of home sales based on contract signings, hit 70.6 in January, an all-time low.

NAR noted last year’s cyclical low point in July was a 70.2, but was later revised to 71.2.

“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 NAR Chief Economist Lawrence Yun. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”

“Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices,” Yun continued.

The PHSI for the Northeast rose 0.3% on a monthly basis, but is down 0.5% from January 2024.

The Midwest metric is down 2% from December, and down 2.7% year-over-year.

The South PHSI fell 9.2% in January on a monthly basis and is down 8.8% annually.

And, the West PHSI fell 1.2% from December and 4.5% from January 2024.