The latest data from the National Association of Realtors show that pending home sales in January in the United States fell to their lowest level recorded.
Between December and January, pending home sales in the country slipped 4.6%, dropping to their lowest level since the National Association of Realtors (NAR) began tracking the metric in 2001. Lawrence Yun, the NAR’s chief economist, says bad weather may have played a role.
“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. However, it’s evident that elevated home prices and higher mortgage rates strained affordability,” said Yun, per CNBC.
Although weather may have contributed, higher borrowing rates and elevated home prices are the more likely culprits. When zooming in on the country, sales actually rose month to month in the colder Northeast but fell in the West, where cold temperatures were less severe.
The South saw the most significant drop-off in sales, despite being the most active part of the U.S. real estate market in recent years.
Earlier in February, The Dallas Express reported that homebuilder sentiment in the country had fallen to a five-month low. The drop was at least partly attributed to elevated borrowing rates suppressing demand.
In January, mortgage rates were higher, with 30-year fixed loans above 7% for the entire month. In contrast, in the first half of December, rates persisted below 7% before starting to rise and increasingly deter prospective buyers. While the average U.S. home price has cooled somewhat in recent months, it remains higher than one year ago.
Notably, the fall in sales comes as the inventory of homes for sale in the U.S. in January was up by 17% year over year, the 14th straight month of growth.
North Texas, too, is seeing more homes on the market.
Between April 2024 and January 2025, inventory in the Dallas-Plano-Irving market averaged three months. That means housing inventory in the area would take three months to sell all available homes at the then-current rate.
At the peak of pandemic buying, the housing inventory was considerably shorter at just two to three weeks.