Existing-Home Sales Kick Off 2025 On A Down Note

The Good Brigade/Getty Images; Illustration by Grant Crowder/Bankrate

Existing-home sales lost momentum in January 2025, sliding nearly 5 percent from December, but they were up slightly year-over-year, the National Association of Realtors (NAR) reports. The median home sale price for January was $396,900, the highest January median on record.

“Persistently higher mortgage rates are not helping,” said Lawrence Yun, chief economist at NAR.

Mortgage rates have hovered around 7 percent for all of 2025 thus far, contributing to sluggish home sales. The average 30-year fixed mortgage rate rose from a low of 6.2 percent in September 2024 to 7.0 percent as of Feb. 19, according to Bankrate’s survey of large lenders.

With home prices historically high, affordability challenges remain daunting for homebuyers. Lower mortgage rates would relieve some of that pain — but they also could lure more buyers into the market, further fueling prices.

“The fate of the housing market in the coming months will be dictated in part by the direction of mortgage rates, as well as the health of the broader economy,” says Mark Hamrick, Bankrate’s senior economic analyst. “The market could benefit from a combination of tailwinds, if they were to develop and are sustained.”

Existing-home sales tick down

The count of existing-home sales includes all completed resales, including single-family houses, condos, townhouses and co-ops. According to NAR, the number of sales nationally decreased from the previous month to an annual pace of 4.08 million transactions in January.

In January, existing-home sales in the Northeast fell 5.7 percent from December, but still up 4.2 percent from January 2024. In the Midwest, sales stayed unchanged from December at an annual rate of 1 million, up 5.3 percent from the previous year. Existing-home sales in the South fell 6.2 percent from December to an annual rate of 1.83 million in January, unchanged from a year before. And in the West, sales dropped 7.4 percent to an annual rate of 750,000, up 1.4 percent from a year ago.

Days on market

Properties typically remained on the market for 41 days in January, up from 35 days in December and 36 days in January 2024. Selling times are a crucial measure at any time of year, but especially during the peak spring and summer selling seasons.

Home prices still high

The nationwide median sale price for existing homes in January was $396,900 — the highest-ever price for the month, according to Yun. That’s below June’s all-time high of $426,900, mostly due to seasonality, but it’s still an increase of 4.8 percent from last year. This marks 19 consecutive months of year-over-year price increases.

The median price in the Northeast in January was $475,400, up 9.5 percent year-over-year. In the Midwest, the median was $290,400, up 7.2 percent from January 2024. The median price in the South was $356,300, up 3.5 percent from last year. And the median price in the West was once again the highest by far at $614,200, up 7.4 percent from January 2024.

First-time homebuyers made up 28 percent of sales in January, an improvement over the all-time low of 26 percent in August and September. Cash sales accounted for 29 percent of transactions in January, slightly up from 28 percent in December but down from 32 percent in January 2024.

Supply again improves year-over-year

Housing inventory at the end of January was 1.18 million units, up 3.5 percent from December and 16.8 percent from one year ago. Unsold inventory sits at a 3.5-month supply at the current sales pace, up from 3.2 months in December and 3.0 months in January 2024. However, that’s still quite a bit lower than the 5 or 6 months typically considered necessary for a balanced market.

“More housing supply allows strongly qualified buyers to enter the market,” Yun said. “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.”