The lagged impact of a resurgence in mortgage rates can back to bite existing home sales in January, as they fell 4.9% MoM (worse than the 2.6% decline expected). That is the biggest MoM drop since Nov 2022...

Source: Bloomberg

Sales declined the most in the West and South, which were afflicted by destructive wildfires in Los Angeles and severe winter weather, respectively. 

To the extent weather played a role, those sales are just a matter of timing and will probably take place in subsequent months instead, NAR Chief Economist Lawrence Yun said on a call with reporters.

Optimism about the US housing market should remain muted though as rates are flat since this data hit...

Source: Bloomberg

“Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve,” Yun said in a statement. 

“When combined with elevated home prices, housing affordability remains a major challenge.”

Even so, prices are still climbing. 

The median sale price climbed 4.8% from a year ago to $396,900, reflecting more activity at the higher end - especially homes priced above $1 million. 

Source: Bloomberg

Yun said that partially reflects strong performance in the stock market for higher-income buyers as well as more homes shifting into higher price brackets.

Properties stayed on the market for 41 days on average in January, the highest in five years.

Finally, Yun said NAR is concerned about the Trump administration’s interest in privatizing mortgage giants Fannie Mae and Freddie Mac, which have been in government conservatorship since their bailouts in 2008. Releasing them from the government could lead to even higher mortgage rates, he said.