Pending home sales in the US fell to a record low in January, influenced by high mortgage rates and soaring home prices. The National Association of Realtors reported a 4.6% decline in its Pending Home Sales Index to 70.6. While sales dipped across the Midwest, South, and West, the Northeast saw slight increases despite harsh weather. The median home price rose 4.8% year-over-year, continuing a streak of price increases. Economists are cautious about future sales, attributing current lows to affordability issues exacerbated by the economic climate.
It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months.
Elevated home prices and higher mortgage rates strained affordability, with January's mortgage rates between 6.91% and 7.04%, contributing to the drop in pending home sales.
The national median sales price rose 4.8% in January from a year earlier to $396,900, marking the 19th consecutive month of price increases.
Pending transactions fell 5.2% from the year-ago period, with significant month-over-month declines observed in the Midwest, South and West regions.
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