U.S. pending home sales in January fell by 4.6%, while housing affordability continues to be under pressure.

According to the latest data released by the National Association of Realtors (NAR) in the United States, the pending home sales index in January 2025 decreased by 4.6% compared to the previous month. Transactions in the Midwest, South, and West regions all saw declines, with the South experiencing the most significant drop, while the Northeast saw a slight increase. Year-on-year, the pending home sales volume in all four regions of the United States has also decreased, with the South experiencing the largest decline. The Pending Home Sales Index (PHSI) - a forward-looking housing market indicator based on contract signings - fell by 4.6% to 70.6 in January, reaching its lowest level in history. Compared to the same period last year, pending transactions decreased by 5.2%. The index is benchmarked at 100, equivalent to the level of contract signing activity in 2001. Lawrence Yun, Chief Economist of the National Association of Realtors, said, "It is unclear whether the market has been affected by the coldest January weather in the past 25 years, leading to a decrease in buyers. If this is indeed the case, sales activity in the coming months may rebound. However, high home prices and higher mortgage rates are undoubtedly weakening the affordability for buyers." In January, housing affordability continued to be under pressure, with 30-year fixed mortgage rates fluctuating between 6.91% and 7.04%. Compared to the same period last year, monthly mortgage payments have further increased. For example, for a $300,000 house, buyers would need to pay an additional $50 per month, increasing monthly payments to $1590. Market performance varies across different regions in the United States. The Northeast saw a slight increase of 0.3% in the pending home sales index for January, reaching 63.4, with a 0.5% year-on-year decrease. The Midwest index decreased by 2.0% compared to the previous month, reaching 72.8, with a 2.7% year-on-year decrease. The South experienced the most severe impact, with the index declining by 9.2% compared to the previous month, reaching 81.0, and an 8.8% year-on-year decrease. The West saw a 1.2% decrease in the index compared to the previous month, reaching 57.6, with a 4.5% year-on-year decrease. Yun added, "Even with a slight decrease in mortgage rates, it may stimulate housing demand, as income growth, job gains, and an increase in market inventory, will all drive more buyers into the market."