Pending US Home Sales Slide to All-Time Low in January
High Mortgage Rates, Record-High Home Prices, and Weather Contribute to the Decline
Pending home sales in the United States have reached an all-time low in January, with a decline of 4.6% to 70.6, according to the National Association of Realtors (NAR). This is a 5.2% decline from the year-ago period. The decline is attributed to high mortgage rates, record-high home prices, and possibly the terrible weather last month.
Pending Sales Decline in Most Regions
The decline in pending sales was seen in most regions, with the most significant drop in the South. The Midwest and West also experienced month-over-month declines. However, the Northeast region saw a modest increase in sales.
NAR Chief Economist Weighs In
In a statement, NAR Chief Economist Lawrence Yun attributed the decline to elevated home prices and higher mortgage rates, which have strained affordability. He noted that it is unclear if the coldest January in 25 years contributed to the decline, but he expects sales to pick up in upcoming months.
Mortgage Rates and Home Prices
Mortgage rates in January ranged between 6.91% and 7.04%. Home prices continued to rise, with a 4.8% increase in January from a year earlier, reaching a median sales price of $396,900.
US Home Sales
US home sales slipped 4.9% in January from December to a seasonally adjusted annual rate of 4.08 million units. While this is a decline, it is the fourth consecutive year-over-year increase.
Home Builder Stocks
Shares of publicly traded home builders have been punished this year, with Toll Brothers down 11%, D.R. Horton and Lennar down between 7% and 9%, and Beazer Homes down nearly 17%.
Conclusion
The decline in pending home sales is a reflection of the challenges faced by homebuyers, including high mortgage rates and prices. While the weather may have played a role, it is clear that affordability is a major concern. As the market continues to evolve, it will be important to monitor these trends and their impact on the US housing market.
FAQs
* What caused the decline in pending home sales?
+ High mortgage rates, record-high home prices, and possibly the terrible weather last month.
* Which regions experienced a decline in pending sales?
+ Midwest, South, and West, with the most significant drop in the South.
* What is the current mortgage rate range?
+ 6.91% to 7.04%
* What is the current median sales price of a home in the US?
+ $396,900
* What is the current trend in US home sales?
+ The fourth consecutive year-over-year increase, but with a decline in January.
