Core Insights - The U.S. housing market is facing challenges due to high home prices, declining supply, and weakened consumer confidence [1] Sales Performance - Sales of previously owned homes in January fell by 8.4% from December to an annualized rate of 3.91 million, marking a 4.4% decrease compared to January 2025, the slowest pace since December 2023 [2] - The decline in sales was most pronounced in the South and West regions of the U.S. [3] Affordability and Supply - The National Association of Realtors (NAR) reported that affordability conditions are improving, with the Housing Affordability Index indicating the most affordable housing since March 2022, driven by wage gains outpacing home price growth and lower mortgage rates [4] - Despite improvements in affordability, housing supply remains low, with 1.22 million homes for sale at the end of January, representing a 3.7-month supply, below the balanced market threshold of six months [4] Home Prices and Market Dynamics - Tighter supply has kept home prices positive, with the median home price in January at $396,800, a 0.9% increase year-over-year and the highest January price on record [5] - Homes are taking longer to sell, averaging 46 days in January compared to 41 days in January of the previous year [5] - The market is seeing stronger sales in the higher-end segment, particularly for homes priced over $1 million, while sales for homes priced below $250,000 have dropped significantly [6]