US Home Sales Slowest in 5 Years: Average 2-Month Wait, Report Finds

Buyers have been cautious about purchasing homes, hoping for prices to drop, according to a real estate expert. Last month, homes in the U.S. sold at their slowest pace in nearly half a decade due to high mortgage rates and prices, as noted by Redfin. For the four weeks ending January 26, “the typical U.S. home listing that went under contract sat on the market for 54 days before the seller accepted an offer, the longest span since March 2020 and a week longer than this time last year,” the company highlighted in a January 30 statement.

Back in 2022, during the pandemic-driven homebuying boom, houses typically sold in just 35 days. The slow pace of home sales is linked to the average weekly rate for a 30-year fixed-rate mortgage hovering around 7 percent last month. Sam Khater, chief economist at Freddie Mac, mentioned that this rate has been fluctuating between 6 percent and 7 percent for most of the past two and a half years.

Meanwhile, home prices climbed by 4.8 percent, with the median monthly housing payment reaching $2,753, nearly hitting last April’s record high, according to Redfin. These factors have made buying a home quite costly. Additionally, “extreme weather—including snow and frigid cold in the Midwest, South, and Northeast and wildfires in Southern California—are keeping would-be buyers at home,” the brokerage noted.

Homes are lingering longer on the market, with a 5.2-month supply, the highest since February 2019, as reported. Redfin anticipates the market will pick up soon as mortgage rates decrease and new listings increase. Some buyers might decide to dive into the market, weary of waiting for home prices and mortgage rates to fall, the brokerage suggested.

“Prospective buyers have been cautious because they’ve seen homes sitting on the market and they’ve heard interest rates and prices may drop. When the market isn’t competitive, some buyers think they should wait for costs to go down,” Jordan Hammond, a Redfin premier agent in Raleigh, North Carolina, remarked in a statement. “Now it’s pretty clear that sellers aren’t slashing asking prices and mortgage rates aren’t plummeting, so mindsets are shifting.”

People are starting to believe that if they want or need to move, and they can afford to, they should go ahead. A recent report from S&P showed the U.S. National Home Price NSA Index increased by 3.8 percent annually in November. Among the 20 cities tracked by the index, every city except Tampa registered an annual gain.

“Markets in New York, Washington, D.C., and Chicago are well above norms, with New York leading the way. Unsurprisingly, the Northeast was the fastest growing region, averaging a 6.1 percent annual gain,” said Brian D. Luke, head of Commodities, Real & Digital Assets at S&P. “However, markets out west and in once red-hot Florida are trending well below average growth. Tampa’s decline is the first annual drop for any market in over a year.”

Elevated housing costs are creating an affordability crisis. According to data from the National Association of Realtors, a median-priced existing single-family home cost $410,900 in November, up from $357,100 in 2021. Homebuyers had to allocate 25.2 percent of their incomes to monthly mortgage payments, up from 16.9 percent.

President Donald Trump, in a recent presidential memorandum aimed at tackling the cost of living crisis, blamed the previous administration’s overregulation for imposing “almost $50,000 in costs on the average American household.” The memo urged government agencies and executive departments to deliver “emergency price relief” to U.S. citizens, including actions to boost the supply of homes and lower housing costs.

The U.S. Federal Reserve’s benchmark interest rates significantly influence mortgage rates. Last month, the central bank decided not to cut interest rates, keeping them between 4.25 percent and 4.5 percent. This decision followed multiple rate cuts by the Fed last year.

In December 2024, the central bank indicated it expects fewer rate cuts this year, expressing concerns about inflation. The next Federal Reserve meeting is scheduled for March 18–19. The situation remains dynamic, but the housing market’s current state signals a need for cautious optimism.