The National Association of Realtors’ Pending Home Sales Index (PHSI) slipped modestly in January, easily prolonging its stay in a narrow range near all-time lows.
Pending home sales decreased 0.8% month over month and were down 0.4% compared with the same time last year. While affordability conditions have improved somewhat as mortgage rates trend closer to 6%, the improvement has failed to bolster contract activity.
NAR Chief Economist Lawrence Yun noted that lower rates have expanded the pool of mortgage-eligible households, potentially adding hundreds of thousands of new buyers this year. However, he cautioned that without a meaningful increase in housing supply, additional demand could simply push prices higher and renew affordability pressure.
The Midwest and West posted monthly gains, while the Northeast and South declined. On a yearly basis however, the picture changes, with the South and West slightly positive and the Northeast and Midwest down from a year ago—reinforcing the fact that sales activity remains uneven and regional.
Regional Breakdown (Month-Over-Month)
- Northeast: −5.7%
- Midwest: +5.0%
- South: −4.5%
- West: +4.3%
Regional YoY Change
- Northeast: −8.3%
- Midwest: −3.3%
- South: +4.0%
- West: +0.3%
