United States pending home sales fell 0.8% in January amid insufficient supply growth, according to the National Association of Realtors (NAR).
NAR’s pending home sales index declined to 70.9, despite Reuters-polled economists projecting a monthly increase of 1.3%. Pending sales also dropped 0.4% year-over-year in January.
“Improving affordability conditions have yet to induce more buying activity,” said NAR chief economist Lawrence Yun. “With mortgage rates nearing 6%, an additional 5.5 million households that could not qualify for a mortgage one year ago would qualify at today’s lower rates.”
“Unless housing supply increases, these additional potential buyers becoming active in the market could simply push up home prices. This will put increasing pressure on affordability, which is why it is critical to increase supply by building more homes.”
The Northeast saw the largest decrease in pending sales, down 5.7% on a monthly basis. Pending sales in the South also dropped 4.5%, while the Midwest and West reported increases of 5% and 4.3%, respectively.
JPMorgan forecast last month that home prices would remain flat across 2026, saying that rising demand from low mortgage rates would be countered by stalling growth in supply. The average 30-year mortgage rate was 6.10%, per NAR, down from 6.19% in December.
The U.S. House of Representatives passed a new housing affordability package earlier in February, which would lower zoning and regulatory barriers to building new housing. The bill will now be considered by the Senate, which advanced similar measures under defence spending legislation in December.
Total sales of existing homes sank 8.4% to a two-year low in January, NAR said last week. The market had 3.7 months of existing home supply, up slightly from 3.5 months in both November and December.
