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Existing-home sales declined 4.9 percent from December 2024 to a seasonally adjusted annual rate of 4.08 million in January, the National Association of Realtors (NAR) said in a news release on Friday, Feb. 21. The median home price climbed 4.8 percent year-over-year to $396,900, the highest amount ever in a month of January.
In the Northeast, sales fell 5.7 percent from December to an annual rate of 500,000 homes, though they increased 4.2 percent from January 2024. The median price surged 9.5 percent to $475,400.
Prices also increased in the other three major US regions, creating ongoing obstacles for buyers.
"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve," said NAR chief economist Lawrence Yun. "When combined with elevated home prices, housing affordability remains a major challenge."
The 30-year fixed mortgage rate remained high, averaging 6.85 percent as of Thursday, Feb. 20, according to Freddie Mac. Rates dipped slightly from 6.90 percent a year ago but continue to pressure prospective homebuyers.
High housing costs are one of many economic fears Americans have after the first month of President Donald Trump's return to the White House. The affordability crisis may be compounded by new tariffs on construction materials.
The White House announced that 25-percent tariffs on all imported steel and aluminum products will take effect in March. Trump has also implemented a separate 10-percent tariff on goods from China and threatened tariffs on neighboring allies Canada and Mexico.
The National Association of Home Builders (NAHB) has warned those moves could drive up the cost of materials and reduce the real estate construction workforce.
"Ultimately, consumers will pay for these tariffs in the form of higher home prices," said NAHB chair Carl Harris.
The NAR's latest numbers came after the trade group also said 2024 home sales dropped to their lowest level since 1995. First-time buyers made up just 24 percent of the market in 2024—a record-low share since NAR started collecting the data in 1981.
Costs have also stayed high despite an increase in the overall home supply. Housing inventory rose to 1.18 million units, up 3.5 percent from December 2024 and 16.8 percent from the previous year.
The supply of unsold homes stood at 3.5 months at the current sales pace, up from 3.2 months in December.
"More housing supply allows strongly qualified buyers to enter the market but for many consumers, both increased inventory and lower mortgage rates are necessary for them to purchase a different home or become first-time homeowners," Yun said.
First-time buyers accounted for 28 percent of January sales, down from 31 percent in December 2024.
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