U.S. Existing Home Sales (January 2026)

Existing home sales plummet in January, but weather likely an issue 

• Existing home sales fell by a sizable 8.4% month-on-month (m/m) to 3.91 million units (annualized) in January – coming in below an already weak market consensus forecast that called for a decline to 4.15 million. This brought activity near the lowest levels recorded in the post-pandemic period. 
• Sales fell sharply in the single-family segment (-9.0% m/m) and more moderately in the smaller condo/co-op segment (-2.6%). Sizable declines were recorded across all four Census regions, with activity down 10.3% in the West, 9.0% in the South, 7.1% in the Midwest and 5.9% in the Northeast.
• Inventory levels (1.22 million) were down 0.8% from December and up 3.4% from January of last year. Measured at the current sales rate and seasonally adjusting, unsold inventory stood at 4.2 months' supply, up from 4.0 in December and 3.9 in January 2025.
• The median home price was up 0.9% year-on-year – a mild acceleration from 0.4% in the month prior. While showing an improvement in year-on-year terms, the median seasonally adjusted sales price recorded a mild decline on a month-to-month basis, (seasonal adjustment performed by TD Economics). 

Key Implications

• The positive home sales streak at the end of 2025 ended abruptly at the start of this year, with existing home sales taking a notable step back in January. Last month's activity reflects purchase decisions made primarily in December – a period when we saw weekly mortgage purchase applications trend consistently lower. Contract closings last month may have also been impacted from unusually inclement weather – a point reinforced in the National Association of Realtors release. Overall, we don’t think this is the start of a new trend. Weekly mortgage purchase applications firmed through January and mortgage rates are slightly lower than a few months ago – hinting at the potential for a near-term rebound. 
• Looking ahead, we anticipate sales will push gradually higher on the back of expectations for an improving labor market and a bit more easing on mortgage rates. But, with the root causes of the current sluggishness largely unaddressed – stretched housing affordability and inadequate supply – we don't think a major turnaround is in the cards. The U.S. administration is considering several measures to help prop up housing affordability, pointing to added upside potential, with the focus being on demand-side policies. For more on these measures, see our report here: Assessing the Impact of U.S. Housing Affordability Proposals. 

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