U.S. January Existing Home Sales - Sharp fall was signaled by pending home sales
January existing home sales are well below expectations with a fall of 8.4% to 3.91m, the lowest level since September 2024. Bad weather may have played a part but given that pending home sales fell by 9.3% in December, weather is unlikely to be the whole story.
Existing home sales had been picking up in Q4 in what appeared to be a response to renewed Fed easing, but December’s 4.4% rise was particularly sharp. The average of the December and January levels of 4.09m is exactly the same as November’s level, and may illustrate where trend is.
Survey evidence from the NAHB and MBA suggests some loss of momentum in housing demand in January, possibly due to reduced expectations for further near term Fed easing. The December pending home sales and January existing home sales declines may however exaggerate the weakness.
January saw some bad weather late in the month which may have had some impact on sales, though all four regions saw declines and the largest decline came in the West, which was less impacted by the bad weather.
The median price fell by 2.0% on the month but this is in part seasonal. Yr/yr data picked up to a still subdued 0.9% from 0.3% in December, which was the lowest since June 2023.
