U
S pending home sales plummeted to an all-time low in January, hindered by high mortgage rates, record-high home prices, and potentially the severe weather. The National Association of Realtors reported a 4.6% decline in its Pending Home Sales Index to 70.6 last month.

    The index, which measures contract signings, fell 5.2% from the same period last year. Month-over-month declines were seen in the Midwest, South, and West, with the largest drop in the South. The Northeast was a rare exception, experiencing modest sales growth despite harsh weather conditions.

    NAR Chief Economist Lawrence Yun attributed the decline to elevated home prices and higher mortgage rates, which strained affordability. Mortgage rates hovered between 6.91% and 7.04% in January.

    Home sales also slipped 4.9% last month from December to a seasonally adjusted annual rate of 4.08 million units, falling short of economists' expectations. However, sales rose 2% compared to January last year, marking the fourth consecutive annual increase.

    The national median sales price increased 4.8% in January from a year earlier to $396,900, extending its streak of annual gains to 19 months. The US housing market has been in a sales slump since 2022, when mortgage rates began to rise from pandemic-era lows.

    Shares of publicly traded home builders have taken a hit this year, with Toll Brothers down 11% and D.R. Horton and Lennar experiencing declines between 7% and 9%. Beazer Homes is down nearly 17% in 2025, partly due to concerns over tariffs and rising costs for lumber and metals.