U.S. Existing-Home Sales Plunge 8.4% in January Amid Supply Constraints
Event summary
- Existing-home sales dropped 8.4% month-over-month to a seasonally adjusted annual rate of 3.91 million in January 2026.
- Median home price reached a new high for January at $396,800, up 0.9% year-over-year.
- Housing inventory decreased 0.8% from December but rose 3.4% year-over-year to 1.22 million units.
- Housing affordability improved for the seventh consecutive month, with the Housing Affordability Index rising to 116.5.
The big picture
The significant drop in existing-home sales in January highlights the ongoing challenge of low housing supply, which continues to drive up prices despite improving affordability. This trend is critical for the real estate market as it balances between wage gains and mortgage rate reductions. The strategic anomaly lies in the disconnect between improving affordability and the persistent supply constraints, which could impact future market dynamics.
What we're watching
- Supply Constraints
- Whether the low housing supply will continue to drive up prices despite improving affordability conditions.
- Market Volatility
- How weather-related anomalies in January will affect future sales trends and market stability.
- Affordability Trends
- The pace at which housing affordability improvements will translate into increased buyer activity.