Key takeaways
  • Existing-home sales in January plunged nearly 37 percent from a year ago, according to the National Association of Realtors.
  • Home-price gains are slowing — the nationwide median sale price is now $359,000, up just 1.3 percent from a year ago.
  • Inventory rose a bit from December but remains very low.

The housing market remains mired in a slowdown, a new report by the National Association of Realtors (NAR) shows. Sales of existing homes — previously occupied properties, rather than newly built homes — have been on a downward trend since early 2022. And with both mortgage rates and prices remaining comparatively high, home shoppers have pulled back.

“Home sales are bottoming out,” NAR Chief Economist Lawrence Yun said in a statement. “Prices vary depending on a market’s affordability, with lower-priced regions witnessing modest growth and more expensive regions experiencing declines.”

Existing-home sales fall for 12th straight month

Existing-home sales encompass all sales of non-new-construction homes, including single-family houses, condos, townhouses and co-ops. According to NAR, U.S. existing-home sales fell in January for the 12th month in a row. The decrease was 0.7 percent from December and 36.9 percent compared to January 2022.

Regionally, existing-home sales in the Northeast fell 3.8 percent from December and 35.9 percent from January 2022. In the Midwest, sales decreased 5 percent from the previous month and 33.3 percent from one year ago. Existing-home sales in the South rose 1.1 percent in month-over-month but dropped 36.6 percent from a year earlier. And in the West, sales rose 2.9 percent month-over-month but plunged 42.4 percent from the previous year. Yun attributes the fall in sales to mortgage rates, which peaked in late October and early November. Rates have pulled back since then, but they remain well above their 2021 lows.

Homes are also sitting on the market for longer: Properties stayed on the market for 33 days in January, which was up from 26 days in December and from just 19 days in January 2022.

Median sale prices lose momentum

Despite the number of existing-home sales falling and mortgage rates remaining on the high side, median sale prices are cooling rather than crashing. The nationwide median sale price for existing homes is now $359,000, which is below December’s median price of $366,900 but still up 1.3 percent compared to January 2022.

“Half the country is experiencing price declines,” Yun told reporters Feb. 21. That includes the expensive housing market in California, along with formerly fast risers such as Denver, Phoenix, Austin and Boise, Idaho.

January marked 131 consecutive months of year-over-year median sale price increases. In other words, it’s been almost 11 years since home prices were in decline. That’s the longest-running streak since NAR started keeping records — but price momentum is falling.

The West region has the highest median price by far at $525,200, down 4.6 percent since January 2022. In the Northeast, the median rose 0.3 percent to $383,000, and in the South, it rose 3.4 percent to $332,500. The Midwest had the lowest median sale price in January at $252,300, a 2.7 percent increase over last year.

Housing inventory loosens slightly

Total housing inventory — the overall number of homes on the market for sale — sat at 980,000 units at the end of January. That level is up 2.1 percent from December and 15 percent from a year ago. However, at the current sales pace this represents only about a 2.9-month supply. That’s well below the amount needed for a balanced market, typically thought to be five to six months. “Inventory remains low, but buyers are beginning to have better negotiating power,” Yun said. “Homes sitting on the market for more than 60 days can be purchased for around 10 percent less than the original list price.”