Existing Home Sales Plunge in January, Economist Predicts Below-Consensus NAR Report
Existing home sales experienced a significant downturn in January, with one housing economist projecting a seasonally adjusted annual rate of 4.0 million – a substantial drop from December and the prior year. The anticipated figures suggest continued challenges in the housing market, despite a modest increase in home prices.
A leading housing economist projects that January’s existing home sales will fall to a 4.0 million seasonally adjusted annual rate, down 8.0% from December’s preliminary figures and 2.2% year-over-year. This estimate, based on early data from local realtor and Multiple Listing Service (MLS) reports, indicates a weakening trend in the housing sector. Unadjusted sales are expected to show an even steeper year-over-year decline, influenced by fewer business days in January compared to the previous year.
Weather and Data Timing Impact Sales
Adverse weather conditions across much of the country during the latter half of January likely further suppressed closed sales last month. The economist noted that the January report from the National Association of Realtors (NAR) will incorporate revised seasonal factors, potentially altering the final figures.
Furthermore, the timing of the NAR’s data release is impacting the scope of available information. “This estimate is based on less local data than previous years since the NAR is releasing sales data earlier in the month this year,” one analyst noted.
Price Increases Offer Limited Respite
Despite the decline in sales volume, the median existing single-family home sales price appears to be holding steady, increasing by approximately 1.0% compared to January of the previous year. This suggests that while fewer homes are being sold, those that are are maintaining their value.
Consensus Forecast Questioned
The NAR is scheduled to release its official January sales report on Thursday. The current consensus among analysts is a seasonally adjusted annual rate of 4.25 million, an increase from 4.09 million in January 2025 but a decrease from December’s 4.35 million. However, the economist believes this consensus forecast is “too high,” suggesting the NAR’s report may reveal a more pronounced slowdown in the market than currently anticipated.
The housing market continues to navigate a complex landscape of economic factors, and the upcoming NAR report will be closely watched for further insights into its trajectory.
