What factors contributed to the decline in U.S. home sales in January 2025?

The decline in U.S. home sales in January 2025 was primarily due to high mortgage rates and elevated home prices, which deterred potential buyers despite an increase in housing inventory.

How did the national median home price change in January 2025 compared to the previous year?

The national median home price rose 4.8% in January 2025 compared to January 2024, reaching $396,900.

What impact do high mortgage rates have on first-time homebuyers?

High mortgage rates significantly impact first-time homebuyers by increasing borrowing costs, which exacerbates affordability challenges and discourages them from entering the market.

How has the housing inventory changed in recent months?

Housing inventory has been increasing, with a 24.6% rise in actively listed homes compared to January 2024, marking the 15th consecutive month of annual growth.

3 sources·Business

U.S. Home Sales Decline Amid High Mortgage Rates and Rising Prices

U.S. home sales dropped 4.9% in January as rising mortgage rates and prices deterred buyers, despite a slight increase in housing inventory.

67%

33%

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Despite the improved inventory, sellers still generally have the edge over buyers.
Housing market mired in slump as January home sales drop more than expected
New York Post·1M
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The U.S. housing market continues to weaken, as potential buyers face stubbornly high mortgage rates, elevated prices and limited supply of listings.
Home sales drop sharply as prices hit an all-time high for January
CNBC·1M
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Center
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Rising home prices and elevated mortgage rates, which can add hundreds of dollars a month in costs for borrowers, have kept many prospective home shoppers on the sidelines, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase.
January home sales fall as high mortgage rates, prices freeze out would-be buyers
Associated Press·1M
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This source consistently reports facts with minimal bias, demonstrating high-quality journalism and accuracy.
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Center
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Feb 21st, 2025, 4:46 PM ET

Summary

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In January, previously occupied U.S. home sales fell 4.9% to an annual rate of 4.08 million units, driven by persistent high mortgage rates and elevated home prices. Although sales increased 2% compared to January 2024, they remained below economist expectations. The national median price hit $396,900, marking a 4.8% annual rise. Despite an increase in listings, first-time homebuyers continue to struggle as affordability issues persist, with a 3.5-month supply of homes available. Experts predict that without significant decreases in mortgage rates, the challenges for potential buyers, particularly first-timers, are likely to continue.

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