US homes sales fell sharply in January, even as mortgage rates continued to ease - AP News
AP News
February 20, 2026
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US home sales dropped significantly in January, despite mortgage rates continuing to decline. The sharp decline reflects broader challenges in the housing market, including rising home prices and economic uncertainties. While lower interest rates typically boost buyer demand, other factors such as inflation and limited inventory have dampened activity. This trend highlights the delicate balance between mortgage costs and housing affordability.
The easing of mortgage rates has been a consistent trend over recent months, with average 30-year fixed-rate loans dropping to around 6.15% in January, down from higher levels earlier in 2023. However, this reduction has not translated into increased sales volumes, suggesting that buyers are still grappling with the high cost of homes relative to their incomes. Many potential buyers are finding it difficult to enter the market, even as borrowing costs decrease.
Economic factors such as inflation and wage growth have played a role in shaping buyer behavior. While wages have been rising, they haven’t kept pace with surging home prices, leaving many would-be purchasers on the sidelines. Additionally, builders have struggled to keep up with demand, leading to a shortage of available homes for sale. This imbalance between supply and demand has contributed to the sharp decline in January sales.
The housing market’s performance is closely tied to broader economic conditions. The drop in home sales underscores the ongoing strain that high prices and economic uncertainty are placing on buyers. For those looking
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Originally published on AP News on 2/20/2026