What did pending home sales look like in January 2025?
Despite record-setting chilly weather, pending home sales increased some in January in the Northeast, the National Association of Realtors (NAR) said in a report released today.
While contracts to purchase homes decreased in other regions of the country, the NAR’s chief economist expressed optimism that sales will improve as we emerge from winter’s grip.
"It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months," NAR Chief Economist Lawrence Yun said.
"Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices," Yun said in the NAR report.
Pending home sales are indicators of the direction of the housing market in general based on contracts signed for homes for sale.
Which regions showed changes in pending home sales?
Three of four regions the NAR tracks in the U.S. showed some declines in pending sales in January from the previous month, though even those declines were relatively small.
- The Northeast experienced a 0.3% increase in pending sales from last month.
- Pending sales in the Midwest slipped 2.0% from the previous month.
- Signed contracts in the South slid the most, down 9.2% from the previous month.
- Pending sales in the West dropped a modest 1.2% from the previous month.
“It's evident that elevated home prices and higher mortgage rates strained affordability," Yun added in the NAR report.
Wintertime and the holiday season tend to be slower periods for home sales, and contract signing could pick up as mortgage interest rates decline and the weather warms up heading into spring.
Did mortgage rates show any change?
According to data from Freddie Mac, the 30-year fixed rate mortgage averaged 6.76% as of Feb. 27*. That’s down from 6.86% one week ago and down from 6.94% one year ago. Continued progress on mortgage rates cooling off will likely be a welcome sign to prospective homebuyers. A decrease in mortgage rates could also signal the start of an early thaw in the housing market as we inch towards spring homebuying season.
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* National average rates from Freddie Mac as of 2/27/25 are not advertised rates from Guaranteed Rate Affinity.