Pending home sales hit an all-time low in January, according to the National Association of Realtors (NAR).

The association’s index, which tracks contract activity on a nationwide basis, declined 4.6% in January and 5.2% year-over-year. Pending sales declined in all regions except the Northeast, where they ticked up slightly.

In technical terms, the index was down 60 basis points to 70.2 from a year earlier. The index is benchmarked at 100, equal to the level of contract activity in 2001.

NAR’s Chief Economist Lawrence Yun said high home prices and interest rates, which ticked over the 7% threshold in January, strained affordability. 

“Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices,” Yun said.

An especially cold January could also have impacted buyer activity, Yun said.

“If so, expect greater sales activity in upcoming months,” Yun said.

The Northeast pending sales index rose 0.3% from last month to 63.4, down 0.5% from January 2024. The Midwest index contracted 2.0% to 72.8 in January, down 2.7% from the previous year.

Pending sales in the South plunged 9.2% to 81 in January, down 8.8% from a year ago. The West index fell by 1.2% from the prior month to 57.6, down 4.5% from January 2024.