• Existing homes sales fell 4.9% in January to a seasonally adjusted annual rate (SAAR) of 4.08M but remain 2% higher than in January 2024, according to the National Association of Realtors (NAR).
• Total housing inventory at the end of January increased to 1.18 million units. That’s up 3.5% from December and 16.8% higher than a year ago.
• The median existing-home sales price in January was $396,900, up 4.8% from a year ago.

What happened: Sales of existing homes fell more than expected in January. Existing home sales in January mostly reflect contracts signed in December—when mortgage rates were on the rise again.

Why it matters: While existing homes sales fell to a near 30-year low in 2024, some of this decline was due to rate lock — homeowners refusing to give up their ultra low pandemic mortgage rates. 

Sellers returned in January, but the demand side seems off to a slow start—though perhaps not for long. The monthly flow of homes coming on the for-sale market is now 12% higher than a year-ago according to Zillow data.

Historically, the number of homes for sale is positively correlated with the measure of home buyers. This is because most sellers end up buying again, adding to the pool of potential first time home buyers. 

Mortgage rates remain a key factor and while rates remain higher than a year ago, they have been easing since mid-January. However, weather disruptions in January will likely muddy the picture in next month’s existing home sales report. Los Angeles wildfires and the unusual January freeze in parts of the country likely delayed home tours, and closings.

Moving forward, Zillow forecasting expects home values to increase by just 0.9% this year – a drop from the previous expectation of 2.9%. Despite a weaker-than-expected start of the year, Zillow forecasts 4.11 million existing home sales in 2025.