Home sales are falling sharply in the US, hinting at an upcoming housing crisis. The decline comes after weak consumer confidence that’s weighing on the overall economy. The chief economist for the National Association of Realtors, Lawrence Yun, is calling it “a new housing crisis.”
The sales from the previously-owned homes have dropped a wider-than-expected margin of 8.4% in January, which is leading to the talk of a housing crisis. This means that sales were lower by 4.4% than in January 2025. It is also the biggest monthly drop since February 2022, when the market was coming out of the Coronovirus situation.
While the home sales fell across the US month-to-month, they were down the most in the South and West. Yun noted that renters usually shift from renting to buying a house when their income steadily increases. However, he stressed that potential buyers are “still struggling” and “renters are not participating in housing wealth,” which is leading to a crisis.
The median price of a house in January is $396,800, up 0.9% year-over-year. He also explained that homes are taking longer to sell, reaching a typical of 46 days. The previous year, it took around 41 days to close a deal. The AI bubble is also an axe hanging over the heads of thousands of employees across the US. All of these economic situations are brewing a housing crisis with declining home sales.
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No Housing Crisis Among the Affluent: Home Sales Rise Among $1 Million or More Pricing
While home sales are down for housing below $1 million, pointing towards a housing crisis, the affluent can afford houses costing more than $1 million, and demand remains strong. The only price segment that is positive compared to last year is the $1 million-plus range. The development indicates the widening gap between the working class and the affluent in the US.