Pending home sales in the United States showed notable stability in January 2026, reflecting buyer caution despite improved housing affordability. According to a report issued by the National Association of Realtors, contracts to purchase existing homes declined by 0.8% compared with December and fell 0.4% year over year.
Regionally, clear variations emerged. Monthly sales increased in the West and Midwest, while declines were recorded in the Northeast and the South. On an annual basis, the South and West experienced growth in sales, whereas performance weakened in the Northeast and Midwest.
Lawrence Yun, Chief Economist at the National Association of Realtors, explained that improved affordability has not yet been sufficient to trigger a significant rise in purchase activity. He noted that the drop in mortgage rates to around 6% has made roughly 5.5 million additional households eligible for home loans for the first time in about a year.
Yun expects approximately 10% of those families to enter the housing market, potentially adding nearly 550,000 new buyers this year compared with the previous year.
Sam Khater, Chief Economist at Freddie Mac, commented that interest rates continue to decline, reaching their lowest levels since September 2022. He added that this drop has not only strengthened purchasing power for prospective buyers but has also improved the financial position of existing homeowners.
Khater noted that refinancing applications have nearly doubled compared with the previous year, significantly reducing annual mortgage payments. Despite the noticeable decline in borrowing costs to multi-year lows, many buyers remain cautious. Lower interest rates alone appear insufficient to drive a substantial rebound in housing demand.
Analysts believe that affordability challenges, limited housing supply, and ongoing economic uncertainty remain key factors preventing a broad recovery in the real estate market.
