Pending home sales dropped 4.6% to an all-time low in January, according to an index produced by the National Association of Realtors (NAR) that looks at contract signings. The South saw the largest drop month over month and the Midwest and West also experienced losses. The Northeast experienced a modest gain. All four regions saw year-over-year losses.

The Pending Home Sales Index is a forward-looking measure of home sales based on contract signings. An index of 100 is equal to the level of contracts signed in 2001. The index fell to 70.6 in January, which was the lowest since NAR has been tracking this metric. The low point in 2024 was 71.2 in July. (The initial index was 70.2 but was later revised upward.)

NAR’s Chief Economist Lawrence Yun pointed to the wintry weather in January across the U.S. as a potential cause for the sudden drop in pending sales. The U.S. experienced the coldest January since at least 2011, according to Accuweather. If homebuyers stayed away because of the snow, Yun suggests that a rebound could be in sight.

“If so, expect greater sales activity in upcoming months,” Yun said in a statement. “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”

Yun pointed to interest rates, which ranged between 6.91% to 7.04% for the month, according to Freddie Mac. He said that could add an extra $50 a month on monthly mortgage payment on a $300,000 home compared to rates in January 2024, which hovered between 6.6% to 6.69%.

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

The Northeast index rose 0.3% from in January to 63.4, down 0.5% from January 2024. The Midwest index fell 2% to 72.8 in January, down 2.7% from the previous year.

The South dropped the sharpest at 9.2% to 81.0 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.