Housing Contract Activity Hits Record Low Amid High Rates and Cold Weather
Homebuying activity has plummeted to its lowest level on record in January, with the National Association of Realtors' Pending Home Sales Index dropping 4.6% from a month earlier and reaching an all-time low of 70.6. The decline was driven by cold weather, unaffordable prices, and higher mortgage rates that made it difficult for buyers to secure financing. With home contract signings capped at historic lows, the market is expected to show signs of life in the coming months as interest rates potentially ease.
- The sharp contraction in housing contract activity highlights the vulnerability of the US economy to extreme weather events and the ongoing struggle of homebuyers to overcome high prices and mortgage rates.
- As the market enters a new cycle, will policymakers be able to find a balance between supporting homeownership and addressing the root causes of affordability, or will the squeeze on buyer demand continue to drive prices higher?