HousingWireHousingWire
Another report, another dismal assessment of the January housing market. The Pending Home Sales Index (PHS) from The National Association of Realtors (NAR) shows a 5.2% year-over-year drop nationally and a 4.6% decline compared to December.
It’s the latest in a string of reports that show a housing market that’s been slow out of the gate in 2025.
“Falling new- and existing-home sales in January suggest that the winter’s chill may persist longer than expected due to still-high housing costs,” said Realtor.com Senior Economic Research Analyst Hannah Jones in a statement. “General economic uncertainty around the Trump administration’s various proposals may also give buyers pause as they wait and see how things shake out.”
Regionally the index also shows a decline, led by the South, which fell 9.2% compared to December and by 8.8% relative to a year ago. The Northeast (0.5%), the Midwest (2.7%) and the West (4.5%) also experienced year-over-year drops.
The housing market data for January don’t bode well for the real estate industry heading into spring.
Existing-home sales were a relative bright spot. NAR’s report last week showed a 4.9% drop in January compared to December, but sales were up 2% year over year, the fourth consecutive month of annual gains.
The new-home sales report from the U.S. Census Bureau and the U.S. The Department of Housing and Urban Development revealed sales dropping by a whopping 10.5% from December, while they dropped 1.1% compared to last year.
Housing starts and permits data from the Census Bureau attributed colder-than-usual temperatures to a 9.8% month-over-month drop in starts and a 1.7% annual decline in permits.
Taken together, the reports paint the picture of a housing market that has plenty of room to improve as things progress in 2025.
“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 in a statement. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”
