Existing-home sales fell by 4.9% month-over-month from December 2024 to January 2025, to a seasonally adjusted annual rate of 4.08 million. In spite of the month-to-month decline, sales were still up 2% nationally on a year-over-year basis—the fourth straight month sales were higher than the same time last year.
Existing-home sales also slumped in three of the four major U.S. regions, while following the same year-over-year pattern as on the national level (mostly rises across the board).
The Midwest was the only region that didn’t see a month-to-month drop in sales (holding roughly flat), while the South was the only region where year-over-year sales experienced no movement.
“Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve,” said National Association of REALTORS® (NAR) Chief Economist Lawrence Yun. “When combined with elevated home prices, housing affordability remains a major challenge.”
Total housing inventory registered 1.18 million units at the end of January, a month-over-month increase of 3.5%, and a significant year-over-year increase of 16.8% (total units were 1.01 million in January 2024). Unsold inventory sits at a 3.5 month’s supply at the current sales pace, a month-over-month increase from 3.2 month’s supply in December—up year-over-year from three months in January 2024.
“More housing supply allows strongly qualified buyers to enter the market,” Yun added. “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.”
The median existing-home price for all housing types in January was $396,900, a 4.8% rise from one year ago, while the median existing-home price was $378,600.
Realtor.com® Chief Economist Danielle Hale said in a statement that the dip in sales on a monthly basis was reflected in pending home sales data from December, but also explained that price memory may be giving way as people adjust to higher mortgage rates on a long-term basis.
“Despite the step back, sales notched a fourth year-over-year gain, rising 2%. January’s slower sales pace was foreshadowed by a dip in pending home sales in December. Mortgage rates averaged 6.7% in November and December when these homes with January closings generally went under contract, a noticeable uptick from September when mortgage rates were in the low 6% range,” she said. “Although home sales pulled back somewhat, the fact that we saw growth compared to one year ago suggests that a fair number of buyers have adapted to the higher mortgage rates in today’s market environment.”
The monthly REALTORS® Confidence index showed that properties typically stayed on the market for 41 days in the month of January, a month-over-month increase from 35 days in December and a year-over-year increase from 36 days in January 2024.
The index also showed that first-time homebuyers accounted for 28% of sales in January, which was down from 31% in December 2024 and identical to January 2024. NAR previously found last year that the proportion of first-time homebuyers fell to an all-time low of 24%.
Sales completely with cash only made up 29% of January transactions, an increase from 28% in December 2024, but a decrease from 32% in January 2024.
Real estate investors and second-home purchasers, who frequently make up a large percentage of cash only sales, made up 17% of January home sales, an increase from 16% in December 2024 and unchanged from January 2024.
Sales of distressed properties—foreclosures or short sales—represented 3% of all sales, which was virtually unchanged on a month-to-month and year-over-year basis.
According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.85% as of Feb. 20, 2025. That’s a decrease from one week ago (6.87%) and one year ago (6.90%).
Regional breakdown
In the Northeast, existing-home sales declined 5.7% from December to an annual rate of 500,000—still up 4.2% from one year ago. Median home price in the region was $475,400, a 9.5% increase on a year-over-year basis.
The Midwest saw existing-home sales stay unchanged on a month-over-month basis, at an annual rate of 1 million, a 5.3% increase on a year-over-year basis. The median price in the Midwest was $290,400, a 7.2% increase from the previous year in January 2024.
In the South, existing-home sales declined month-over-month by 6.2% to an annual rate of 1.83 million for the month of January, which was identical to the year before. Median price for this region was $356,300, up 3.5% from last year.
Existing-home sales in the Western region slumped 7.4% to an annual rate of 750,000, a 1.4% increase on a year-over-year basis. The median price in the West was $614,200, up 7.4% from January 2024.
