Pending Home Sales Index Fell to All-Time Low in January at 70.6

Washington, DC, February 27, 2025-The Pending Home Sales Index (PHSI) fell 4.6% to 70.6 in January, an all-time low, according to the National Association of Realtors. (Last year's cyclical low point in July 2024 was revised from 70.2 to 71.2.)

Year-over-year, pending transactions declined 5.2%. An index of 100 is equal to the level of contract activity in 2001.

"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," said NAR chief economist Lawrence Yun. "However, it's evident that elevated home prices and higher mortgage rates strained affordability."

Housing affordability suffered in January as mortgage rates ranged from 6.91% to 7.04%. Compared to one year ago, the monthly mortgage payment on a $300,000 home increased by an extra $50 to $1,590.

The Northeast PHSI rose 0.3% from last month to 63.4, down 0.5% from January 2024. The Midwest index contracted 2.0% to 72.8 in January, down 2.7% from the previous year.

The South PHSI plunged 9.2% to 81.0 in January, down 8.8% from a year ago. The West index fell by 1.2% from the prior month to 57.6, down 4.5% from January 2024.

"Even a slight reduction in mortgage rates will likely ignite buyer interest, given rising incomes, increased jobs and more inventory choices," added Yun.