Whether cold weather makes for cold feet was the question raised by the chief economist of the National Association of Realtors (NAR), reaching for an explanation for a sharp contraction in the pace of existing-home sales in January.
“The below-normal temperatures and above-normal precipitation this January make it harder than usual to assess the underlying driver of the decrease and determine if this month’s numbers are an aberration,” said Lawrence Yun in a press release announcing the sales figures on Thursday.
Plunging 8.4% from December and 4.4% from a year ago, the pace of existing-home sales fell to a seasonally adjusted annual rate of 3.91 million — the slowest pace in two years. Declines were broad-based, with all four major U.S. regional markets posting monthly and annual slowdowns.
The pace of existing-home sales fell most sharply in the West region, down 10.3% over the month, followed by respective declines of 9%, 7.1% and 5.9% in the South, Midwest and Northeast. The West also led the annual slowdown, declining 7.9%, followed by a 7.1% drop in the Midwest, a 4% drop in the Northeast and a 1.6% drop in the South.
The median national existing-home price was up 0.9% from a year ago at about $396,800, down from 3.9% annual growth in January 2025 but up from 0.3% annual growth in December. Only the West posted an annual decline in its median existing-home price.
Despite the difficulty Yun expressed in explaining the retreat in sales, likely a confluence of factors impacted overall sales momentum last month, which had surged to multiyear highs in December.
Various measures of purchase affordability show prospective homebuyers broadly enjoy some of the friendliest purchase conditions in more than three years, acknowledging variations between regional markets and borrower segments. Median incomes rose faster than the paces of inflation and national home prices for much of 2025, while average 30-year fixed-rate mortgages have dropped about 80 basis points from year-ago levels.
Driven at least in part by improved affordability, first-time homebuyers saw their purchase share rise modestly last month to 31%, up from 29% in December and 28% a year ago, according to NAR.
Still, the national home price-to-income ratio remains elevated at around 4.8-to-1, “well above its long-run average” around 4-to-1, according to recent reporting from ICE Mortgage Technology. At the same time, some signals point to improvements in affordability as skewed toward higher-income households.
Furthermore, monthly existing-home sales figures typically reflect purchase activity over the previous two months, as pending home sales that go under contract eventually show up in the data as actual closed sales.
A multiyear high in pending home sales in November, for example, translated into a multiyear high in the pace of existing-home sales in December, at 4.35 million units. A 9.3% monthly decline in pending home sales in December, however, presaged the dismal pace of closed sales in January.
Despite steady improvements in affordability, structural challenges in the market — beyond inclement weather — continue to hinder sales growth as homebuyers hesitate on the sidelines.
NAR reported that the median number of days properties sat on the market in January was 46 days, a notable jump from 39 days in December and 41 days last January. Recent survey findings, however, emphasize just how narrow an opportunity many prospective homebuyers feel they have to buy a home in 2026.
Nearly every prospective homebuyer (94%) who responded to a recent poll by Clever Real Estate said they will hesitate to purchase in 2026 if mortgage rates remain above 6% this year — and housing economists widely project rates will hover around this threshold.
Adding additional pressure to closed sales in January, the listings platform Redfin reported recently that home-purchase contract cancellations hit a record pace at the end of 2025 as home sellers outnumber active buyers, enabling buyers to be more selective.
