January 2025 existing-home sales
Existing-home sales slipped 4.9% in January, falling from December’s 10-month-high pace. Despite the step back, sales notched a fourth year-over-year gain, rising 2%. January’s slower sales pace was foreshadowed by a dip in pending home sales in December. Mortgage rates averaged 6.76% in November and December when these homes with January closings generally went under contract, a noticeable uptick from September when mortgage rates were in the low 6% range. Although home sales pulled back somewhat, the fact that we saw growth compared with one year ago suggests that a fair number of buyers have adapted to the higher mortgage rates in today’s market environment.
Home prices continue to climb despite falling list prices
The median home sales price continued to move higher compared with one year ago, gaining 4.8% to a median price of $396,900. This is somewhat different from median home list prices, which have recently declined, according to Realtor.com® housing data. Recent sales growth has been more robust among higher price ranges, whereas data shows that, among listings, lower-priced tiers have seen stronger gains, driving some of the divergence in the two price measures.
What this data means for what’s ahead
Home sales are expected to exceed 2024’s long-term low, according to the Realtor.com 2025 Housing Forecast, despite persistent challenges in the housing market. Weaker rent growth matched against higher homebuying costs has tilted the financial side of the buy-rent decision toward renting in the U.S. and the vast majority of large markets. But financial reasons are just one consideration for potential first-time homebuyers, many of whom consider homeownership an important part of the American dream.