Extreme weather drags down real estate transactions, with US existing home sales in January experiencing the largest drop in nearly four years.

In January, the sale of existing homes in the United States saw the largest monthly drop in nearly four years, with extreme cold weather and widespread winter storms having a significant impact on transactions. According to data released by the National Association of Realtors (NAR) on Thursday, existing home sales in January fell by 8.4% compared to the previous month, equivalent to an annual rate of 3.91 million units, significantly lower than the median expected by economists in media surveys. The report pointed out that the widespread winter storms that swept across the United States in late January brought rain, snow, and icy weather, possibly leading to a large number of pending transactions being postponed. In the hardest-hit southern region (the largest housing sales market in the United States), sales volume fell sharply by 9%, dropping to an annualized level of 1.81 million units, with sales also weakening in other regions. NAR's Chief Economist Lawrence Yun stated in a statement that the unusually low temperatures and above-average precipitation in January make it more difficult to determine the "real driving factors" behind the sales decline, and it is also difficult to determine whether the data for that month represents an abnormal fluctuation. A bright spot in the housing market is the signs of improvement in affordability. Recent declines in mortgage interest rates and a slowdown in home price increases have pushed the NAR Housing Affordability Index to its highest level since 2022, but still significantly lower than before the pandemic. NAR data shows that the median price of existing homes in January rose by 0.9% year-on-year to $396,800. Without a longer period of affordability improvement, the recovery of the housing market may be prolonged. In terms of buyer structure, first-time homebuyers accounted for 31% of sales in January, up from 29% the previous month and from the same period last year. On the supply side, there has been some improvement, with existing home inventory increasing by 3.4% year-on-year to 1.22 million units in January. The gradual increase in supply until 2025 will help restrain price increases, but Yun emphasized in a conference call with reporters that significantly boosting transactions will require a "significantly greater increase in listings." Market participants generally expect existing home sales to rebound this year. A survey conducted in December last year showed that analysts' expectations for the increase in sales volume this year ranged from 1.7% to 14%, assuming that the slowdown in home price increases continues and financing costs stabilize. Data shows that last month's mortgage interest rate dropped to 6.16%, the lowest level in over a year. On the policy front, U.S. President Trump has recently introduced a number of measures to stimulate the housing market in response to political pressure from the lack of affordability. These include efforts to restrict institutional investors from buying single-family homes and directives for Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds to ease the financing environment.