High housing prices, declining supply and declining consumer confidence in the economy continue to weigh on the U.S. housing market. National Association of Realtors Chief Economist Lawrence Yun calls it a “new housing crisis.”
Pre-owned home sales in January fell much more than expected, 8.4% from December, to a seasonally adjusted annual rate of 3.91 million, according to the NAR. Sales were 4.4% lower than in January 2025. This was the slowest pace since December 2023 and the largest monthly decline since February 2022.
This count is based on closings, that is, contracts that were likely signed in November and December, when the average rate on the 30-year fixed mortgage didn’t move much before dipping slightly in January. That rate is now 6.1%, according to Mortgage News Daily.
Regionally, sales fell month-over-month across the country, but sales declined the most in the South and West.
“Affordability conditions are improving, with the NAR Housing Affordability Index showing housing at its most affordable since March 2022,” Yun said in a statement. “This is because wage gains have outpaced house price growth and mortgage rates are lower than a year ago. However, supply has not kept pace and remains quite low.”
But he also noted on a call with reporters that potential buyers “still have a hard time” and “renters don’t participate in real estate wealth.” He called the current market a crisis because “movement is not happening. The Americans are stuck.”
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Inventories fell last month compared to December, but were still up 3.4% year-over-year. There were 1.22 million homes for sale at the end of January, which at current sales rates represents a supply of 3.7 months. A six-month supply is considered a balanced market between buyer and seller.
Tighter supply has kept house prices in positive territory. The median price of a home sold in January was $396,800, up 0.9% year over year and the highest January price on record.
“The owners are thus in a comfortable financial position. As of January 2020, a typical homeowner would have accumulated $130,500 in real estate wealth,” Yun added.
Homes are taking longer to sell, 46 days in January compared to 41 in January last year. Around 31% of sales were made to first-time buyers, compared to 28% a year ago.
Sales continue to be stronger at the premium end of the market; in fact, the only positive price segment from a year ago was over $1 million. Sales fell the most for homes priced below $250,000.
