Residential Real Estate News
U.S. Home Sales Slump Continues in January
According to the National Association of Realtors (NAR), U.S. existing-home sales declined in January 2025, with three major regions experiencing a downturn while the Midwest remained stable. Year-over-year, sales increased in three regions but held steady in the South.
Total existing-home sales--including single-family homes, townhomes, condominiums, and co-ops--dropped 4.9% from December, reaching a seasonally adjusted annual rate of 4.08 million in January. However, sales were up 2.0% from the 4 million reported in January 2024.
Market Challenges
"Mortgage rates have remained stubbornly high for months, despite multiple short-term interest rate cuts by the Federal Reserve," said NAR Chief Economist Lawrence Yun. "Coupled with elevated home prices, affordability remains a significant challenge for buyers."
At the end of January, total housing inventory stood at 1.18 million units, reflecting a 3.5% increase from December and a 16.8% rise from January 2024 (1.01 million). The supply of unsold homes rose to 3.5 months at the current sales pace, compared to 3.2 months in December and 3.0 months a year earlier.
"An increase in housing supply allows financially strong buyers to enter the market," Yun noted. "However, many consumers need both additional inventory and lower mortgage rates to afford a new home or purchase their first property."
The median existing-home price across all housing types in January was $396,900, a 4.8% increase from January 2024 ($378,600). Home prices rose across all four U.S. regions.
Realtors Confidence Index
The latest Realtors Confidence Index revealed that 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 made up 28% of January sales, down from 31% in December and equal to January 2024. NAR's 2024 Profile of Home Buyers and Sellers--released in November 2024--found the annual share of first-time buyers at a record-low 24%.
- Cash sales accounted for 29% of transactions, rising from 28% in December but down from 32% in January 2024.
- Investors and second-home buyers, often behind cash purchases, made up 17% of sales, up from 16% in December and unchanged year-over-year.
- Distressed sales (foreclosures and short sales) represented 3% of January transactions, consistent with December and the previous year.
Mortgage Rates
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.85% as of February 20, 2025, slightly lower than 6.87% the previous week and 6.90% a year ago.
Single-Family & Condo/Co-op Sales
- Single-family home sales fell 5.2% in January to a seasonally adjusted annual rate of 3.68 million, though they were up 2.2% year-over-year. The median price rose 5.0% to $402,000.
- Condominium and co-op sales declined 2.4% in January to an annual rate of 400,000, unchanged from January 2024. The median condo price increased 2.9% to $349,500.
Regional Breakdown
- Northeast: Sales dropped 5.7% from December to an annual rate of 500,000 but were up 4.2% year-over-year. The median price rose 9.5% to $475,400.
- Midwest: Sales remained stable at 1 million annually, up 5.3% from January 2024. The median price increased 7.2% to $290,400.
- South: Sales fell 6.2% month-over-month to 1.83 million annually, unchanged from January 2024. The median price rose 3.5% to $356,300.
- West: Sales declined 7.4% to 750,000 annually but increased 1.4% year-over-year. The median price climbed 7.4% to $614,200.
