Bad weather and fewer homes for sale may be bringing a deep freeze to the housing market this winter. Existing-home sales—including single-family homes, townhomes, condos and co-ops—posted a sharp 8.4% drop in January compared to December and were down 4.4% from a year ago, the National Association of REALTORS® reported Thursday. It’s a soft start to a 2026 housing market that had been showing promising signs of a rebound in the final months of 2025.
“The decrease in sales is disappointing,” acknowledges Lawrence Yun, NAR’s chief economist. Also, a number of factors could be at play—and ones that home buyers may want to pay attention to.
The latest sales figures may be more of a blip than a long-term trend. After all, “the below-normal temperatures and above-normal precipitation this January make it harder than usual to assess the underlying driver of the decrease and determine if this month’s numbers are an aberration,” Yun says. Last month, prolonged freezing temperatures and major winter storms swept across the country.
Why Home Buyers Should Pay Attention
For home buyers, however, the housing market may be presenting opportunities. First-time buyers may be starting to take notice: Thirty-one percent of existing-home sales in January were to first-time buyers, up from 28% a year ago, NAR’s research shows.
“Affordability conditions are improving,” Yun notes. NAR’s Housing Affordability Index shows that housing is the most affordable it’s been since March 2022—this, despite continued rises in home prices.
It’s “due to wage gains outpacing home price growth and mortgage rates being lower than a year ago,” Yun says.
The 30-year fixed-rate mortgage averaged 6.10% in January, down from nearly 7% a year ago, Freddie Mac reports. That could result in hundreds of dollars in lower mortgage payments.
For example, for a home priced at $400,000, with a 10% down payment, a monthly payment at a 7% rate would be $2,419. For a 6.10% rate, however, the monthly payment would be $2,185—$234 in savings.
Further, while home prices continue to rise nationally, the median existing-home sales price was up just 0.9% in January compared to a year ago, a significant moderation from what had been a steep climb. Some areas are even seeing home prices soften, although distressed sales remain at historical lows. Foreclosures and short sales only accounted for 2% of sales in January, the REALTORS® Confidence Index shows.
Homeowners Are Still Seeing the Equity
Home sellers shouldn’t panic. “Due to low supply, the median home price reached a new high for the month of January,” Yun says—a median existing-home sales price of $396,800. “Homeowners are in a financially comfortable position as a result.”
Since January 2020, the typical homeowner has accumulated $130,500 in housing wealth, Yun says.
Some owners are leveraging that equity on their next home sale: All-cash buyers continue to make up a sizable share of existing-home sales, accounting for 27% of transactions in January, NAR’s research shows.
Related: Most Metros Still Posting Record-High Housing Wealth
But Where Are All the For Sale Signs?
Home buyers today may find more bargaining power, but they are likely finding fewer choices than they did in the fall, with housing inventory down 0.8% in January compared to December.
What’s more, realtor.com® reports that supply remains well below pre-pandemic levels, and the national housing supply is 17.2% below typical 2017–2019 levels, the widest gap since last spring.
“The coming months will be a real test for the inventory recovery and the road to affordability,” says Jake Krimmel, senior economist at realtor.com®. “A reacceleration in listings growth alongside easing mortgage rates could bring the market into better balance. … If supply continues to drift tighter, however, lower rates may simply reignite competition and limit how much relief buyers actually feel.”
Homes recently listed for sale are lingering longer: The median time on the market for properties continues to increase, reaching 46 days in January, up from 41 days a year ago.
Still, when priced right and prepped to show, home sellers are seeing offers and getting buyer attention. With high demand in many markets, 16% of homes sold above list price in January, according to the REALTORS® Confidence Index. Also, homes listed received an average of 2.2 offers.
Regional Breakdown for Home Sales
Home sales fell across the country last month, led by a 10.3% month-over-month drop in the West and a 9% drop in the South. Here’s a closer look at how existing-home sales fared in January:
- Northeast: Sales fell 5.9% in January from December to an annual rate of 480,000. Sales are down 4% from a year ago. Median price: $505,400, up 5.8% from January 2025.
- Midwest: Sales dropped 7.1% in January to an annual rate of 920,000. Sales are down 7.1% from a year ago. Median price: $295,400, up 2.3% from a year ago.
- South: Sales fell 9% in January from December, settling in at an annual rate of 1.81 million. Sales are down 1.6% from January 2025. Median price: $351,200, up slightly by 0.1% from a year ago.
- West: Sales dropped 10.3% in January to an annual rate of 700,000. Sales are also down by 7.9% compared to last year. Median price: $600,400, down 1.4% from a year ago.
