US pending home sales declined 0.8% month over month in January 2026, following a revised 7.4% drop in December and defying expectations for a 1.3% increase. This second straight monthly decrease underscores continued strain in the housing market, even as mortgage rates move lower.
Regionally, contract signings fell in the Northeast (-5.7%) and the South (-4.5%), while the Midwest (5.0%) and the West (4.3%) posted gains. On a year-over-year basis, pending home sales were down 0.4%.
“Improving affordability conditions have yet to induce more buying activity,” said Lawrence Yun, Chief Economist at the National Association of Realtors. “With mortgage rates nearing 6%, an additional 5.5 million households that could not qualify for a mortgage one year ago would qualify at today’s lower rates.”
Yun also cautioned that without a meaningful increase in housing supply, the influx of new buyers could drive home prices even higher, worsening affordability challenges and underscoring the urgent need for more residential construction.
