Adverse winter weather and tight inventory coincided with an 8.4 percent decline in U.S. existing-home sales, while affordability metrics showed modest improvement.
By yourNEWS Media Newsroom
U.S. existing-home sales declined 8.4 percent in January to a seasonally adjusted annual rate of 3.91 million, marking the largest monthly decrease since February 2022 and the lowest sales pace since December 2023, according to a Feb. 12 report from the National Association of Realtors.
The data showed a 4.4 percent year-over-year drop in existing-home sales. At the same time, the median sales price for all housing types reached $396,800, reflecting a 0.9 percent increase compared with January 2025.
“The decrease in sales is disappointing,” NAR Chief Economist Lawrence Yun said in the report.
“The below-normal temperatures and above-normal precipitation this January make it harder than usual to assess the underlying driver of the decrease and determine if this month’s numbers are an aberration.”
Yun noted that limited housing inventory contributed to the median price reaching a new high for the month of January. Total housing inventory fell 0.8 percent from December 2025 but was 3.4 percent higher than in January 2025. The housing supply stood at 3.7 months in January, up from 3.5 months in December.
Single-family home sales declined 9 percent month over month. In contrast, condominium and co-op sales fell 2.6 percent over the same period. The median sales price for single-family homes rose 0.6 percent year over year to $400,300. Condominiums and co-ops posted a 3.8 percent annual increase, with a median price of $364,600.
Regionally, the West recorded the largest monthly sales drop at 10.3 percent, followed by the South at 9 percent and the Midwest at 7.1 percent. The Northeast was the only region to post an increase, with sales rising 5.9 percent. Median home prices were highest in the West at $600,400 and lowest in the Midwest at $294,400.
Despite the sales slowdown, affordability metrics showed improvement for the seventh consecutive month.
“Affordability conditions are improving, with NAR’s Housing Affordability Index showing that housing is the most affordable it’s been since March 2022,” Yun said.
“This is 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.”
A separate analysis from Redfin found that while affordability has improved, a household would need to earn at least $111,252 annually to afford the typical home on the market. That figure is down 4 percent from a year earlier, but remains above the estimated national median household income of just over $86,000.
Redfin defines affordability as spending no more than 30 percent of income on monthly mortgage payments. The firm reported that affordability improved in 37 of the 50 largest U.S. metropolitan areas, with the most notable gains in Dallas; Sacramento; and Jacksonville.
“While housing remains historically expensive, the trajectory is finally starting to reverse, with the door to buying a home opening a bit wider rather than closing tighter,” Redfin’s head of economics research, Chen Zhao, said in the report. “But while affordability is improving, Americans are contending with other obstacles on the road to buying a home, like nerves about layoffs and economic uncertainty.”
Redfin also reported that homebuyers typically must earn about $35,000 more annually than renters to afford monthly payments. Renters would need an annual income of at least $76,000 to afford a typical apartment, with median rents nationwide at approximately $1,900 per month.
“Many Americans have been hesitant to jump from renting to buying due to high homeownership costs, but the recent drop in mortgage rates and rise in homebuyer negotiating power may help some take the leap,” Redfin economist Grishma Bhattarai said in the report. “We expect home-buying affordability to gradually improve in the coming year as mortgage rates stay closer to 6 percent than 7 percent, home-price growth loses steam and wages rise faster than housing costs.”
Redfin identified Austin and San Antonio, Texas; Denver, Colorado; Tampa, Florida; and Phoenix, Arizona as the metropolitan areas where the income required to afford rent has declined the most.
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