The U. S. housing market faced its toughest month yet, with second‑hand home sales falling more than 8% in January. This sharp decline reflects high prices, a tight supply of homes, and growing uncertainty about the economy.

The National Association of Realtors reported that 3. 91 million homes were sold, a figure that is the slowest since December 2023 and the largest monthly drop since February 2022. The decline is also bigger than last year’s January, showing a clear slowdown in buyer activity.

While mortgage rates have eased slightly to around 6. 1%, they remain high enough that many potential buyers are still hesitant. Even with some wage growth, the cost of buying a home outpaces what most people can afford.

Supply remains stubbornly low. In January, there were 1. 22 million homes on the market, enough to cover about three and a half months of sales at current rates. A balanced market would require roughly six months’ worth of inventory.

Despite the slowdown, home prices have stayed stable. The median sale price was $396, 800, up 0. 9% from last year and the highest for a January sale on record. This means homeowners are still building equity, with an average gain of $130, 500 in wealth since early 2020.

The market is also shifting. Homes are staying on the market longer—46 days in January versus 41 days a year earlier—and first‑time buyers now account for about one third of all sales. However, the most significant drop in sales is seen in homes priced below $250, 000, while houses over a million dollars remain the only segment with year‑over‑year gains.

Housing Market Hits a Low: Sales Drop Over 8%

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