US Existing Home Sales Drop to Over 2-Year Low in January

Falling inventory raises home prices despite improving affordability

Published on Feb. 12, 2026

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U.S. existing home sales tumbled 8.4% in January to a seasonally adjusted annual rate of 3.91 million units, the lowest level since December 2023. The decline was attributed to falling inventory, which raised home prices despite improving affordability conditions.

Why it matters

The drop in existing home sales reflects ongoing challenges in the U.S. housing market, where low inventory and high prices have limited access to homeownership, particularly for first-time buyers. The data provides insight into the broader economic trends affecting the real estate sector.

The details

The National Association of Realtors reported that the median existing home price rose 0.9% from a year ago to $396,800, the highest for any January. The inventory of existing homes fell 0.8% to 1.22 million units, though supply was up 3.4% from a year ago. At January's sales pace, it would take 3.7 months to exhaust the current inventory of existing homes, up from 3.5 months a year ago.

  • Home sales decreased 4.4% on a year-over-year basis.
  • The NAR's housing affordability index increased to 116.5 in January, the highest since March 2022, from 111.6 in December.
  • Mortgage rates have declined as the Federal Housing Finance Agency, which oversees mortgage finance giants Fannie Mae and Freddie Mac, started buying bonds issued by the two companies, though progress has stalled.

The players

National Association of Realtors

The trade association for real estate professionals in the United States.

Lawrence Yun

The chief economist of the National Association of Realtors.

Federal Housing Finance Agency

The federal agency that oversees mortgage finance giants Fannie Mae and Freddie Mac.

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What they’re saying

“The decrease in ⁠sales is disappointing. Affordability conditions are improving ... due to wage gains outpacing home price growth and mortgage rates ⁠being lower than a year ago. However, supply has not kept pace and remains quite low.”

— Lawrence Yun, Chief Economist, National Association of Realtors (Reuters)

The takeaway

The drop in existing home sales highlights the ongoing challenges in the U.S. housing market, where low inventory and high prices continue to limit access to homeownership, particularly for first-time buyers. While affordability conditions have improved, the lack of supply remains a significant obstacle to a robust housing market recovery.