Existing-Home Sales Decreased 4.9% in January, But Increased Year-Over-Year for Fourth Consecutive Month

Existing-Home Sales Decreased 4.9% in January, But Increased Year-Over-Year for Fourth Consecutive Month

National Association of REALTORS®, article by Troy Green | February 21, 2025

KEY HIGHLIGHTS

• Existing-home sales slid 4.9% in January to a seasonally adjusted annual rate of 4.08 million. However, sales rose 2.0% from one year ago, the fourth straight monthly year-over-year increase.

• The median existing-home sales price advanced 4.8% from January 2024 to $396,900, the 19th consecutive month of year-over-year price increases.

• The inventory of unsold existing homes grew 3.5% from the prior month to 1.18 million at the end of January, or the equivalent of 3.5 months' supply at the current monthly sales pace.

WASHINGTON (February 21, 2025) – Existing-home sales retreated in January, according to the National Association of REALTORS®. Sales slipped in three major U.S. regions and held steady in the Midwest. Year-over-year, sales rose in three regions and were unchanged in the South.

Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – descended 4.9% from December to a seasonally adjusted annual rate of 4.08 million in January. Year-over-year, sales improved 2.0% (up from 4 million in January 2024).

"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve," said NAR Chief Economist Lawrence Yun. "When combined with elevated home prices, housing affordability remains a major challenge."

Total housing inventory registered at the end of January was 1.18 million units, up 3.5% from December and 16.8% from one year ago (1.01 million). Unsold inventory sits at a 3.5-month supply at the current sales pace, up from 3.2 months in December and 3.0 months in January 2024.

"More housing supply allows strongly qualified buyers to enter the market," Yun added. "But for many consumers, both increased inventory and lower mortgage rates are necessary for them to purchase a different home or become first-time homeowners."

The median existing-home price for all housing types in January was $396,900, up 4.8% from one year ago ($378,600). All four U.S. regions registered price increases.

REALTORS® Confidence Index

According to the monthly REALTORS® Confidence Index, properties typically remained on the market for 41 days in January, up from 35 days in December and 36 days in January 2024.

First-time buyers were responsible for 28% of sales in January, down from 31% in December 2024 and identical to January 2024. NAR's 2024 Profile of Home Buyers and Sellers – released November 2024 – found that the annual share of first-time buyers was 24%, the lowest ever recorded.

Cash sales accounted for 29% of transactions in January, up from 28% in December but down from 32% in January 2024.

Individual investors or second-home buyers, who make up many cash sales, purchased 17% of homes in January, up from 16% in December and unchanged from January 2024.

Distressed sales – foreclosures and short sales – represented 3% of sales in January, virtually unchanged from December and the previous year.

Mortgage Rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.85% as of February 20. That's down from 6.87% one week ago and 6.90% one year ago.

Single-family and Condo/Co-op Sales

Single-family home sales declined 5.2% to a seasonally adjusted annual rate of 3.68 million in January, up 2.2% from the previous year. The median existing single-family home price was $402,000 in January, up 5.0% from January 2024.

Existing condominium and co-op sales faded 2.4% in January to a seasonally adjusted annual rate of 400,000 units, identical to one year ago. The median existing condo price was $349,500 in January, up 2.9% from the prior year ($339,500).

Regional Breakdown

In January, existing-home sales in the Northeast waned 5.7% from December to an annual rate of 500,000, up 4.2% from January 2024. The median price in the Northeast was $475,400, up 9.5% from one year earlier.

In the Midwest, existing-home sales were unchanged in January at an annual rate of 1 million, up 5.3% from the previous year. The median price in the Midwest was $290,400, up 7.2% from January 2024.

Existing-home sales in the South fell 6.2% from December to an annual rate of 1.83 million in January, identical to one year before. The median price in the South was $356,300, up 3.5% from last year.

In the West, existing-home sales slumped 7.4% in January to an annual rate of 750,000, up 1.4% from a year ago. The median price in the West was $614,200, up 7.4% from January 2024.

About the National Association of REALTORS®

As America's largest trade association, the National Association of REALTORS® is involved in all aspects of residential and commercial real estate. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings from Multiple Listing Services. Changes in sales trends outside of MLSs are not captured in the monthly series. NAR benchmarks home sales periodically using other sources to assess overall home sales trends, including sales not reported by MLSs.

Existing-home sales, based on closings, differ from the U.S. Census Bureau's series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which account for more than 90% of total home sales, are based on a much larger data sample – about 40% of multiple listing service data each month – and typically are not subject to large prior-month revisions.