Existing-home sales in the South have taken a noticeable hit to start 2025, with figures from the National Association of REALTORS® showing a 6.2% drop from December.
- The region, which accounts for 45% of all home sales nationwide, saw sales fall to an annual rate of 1.83 million—exactly the same as one year ago, yet marking a significant month-to-month decline.
Rising Prices. Despite the downturn in sales volume, the market is experiencing a contrasting trend in pricing. The median sales price in the South increased to $356,300 in January, up 3.5% from one year ago.
- This rise, slightly stronger than December’s 3.4% growth, represents the highest price level observed since May 2024. The simultaneous occurrence of stagnant sales and rising prices points to a market where fewer transactions are taking place, but the value of those transactions is on the upswing.
Nationally, the picture is similarly mixed. Existing-home sales across the country slid 4.9% in January, settling at a seasonally adjusted annual rate of 4.08 million. Regional performance varied considerably: while the Midwest maintained stable sales at an annual rate of 1 million, the Northeast experienced a 5.7% decline and the West saw the steepest drop with a 7.4% fall.
- These regional disparities underscore the uneven nature of the housing market as different areas face unique challenges and conditions.
Inventory. Total national housing inventory at the end of January reached 1.18 million units—a 3.5% increase from December and a significant 16.8% rise from one year ago. Despite this increase, unsold inventory remains at a 3.5-month supply at current sales rates, up from 3.2 months in December and 3.0 months in January 2024.
- First-time buyers, who are often seen as a bellwether for market health, were responsible for 28% of sales in January. This figure, down from 31% in December 2024, matches the percentage seen in January 2024 and signals ongoing challenges for those entering the market for the first time.
What They’re Saying: NAR Chief Economist Lawrence Yun has attributed these trends to persistent affordability challenges. He noted that mortgage rates have “refused to budge for several months” despite multiple rounds of short-term interest rate cuts by the Federal Reserve. With mortgage rates remaining elevated and home prices on the rise, housing affordability continues to be a major issue for potential buyers.
Bottom Line: Existing-home sales continue to remain depressed as rates and prices remain at elevated levels.
