Affordability, Low Inventory Keep Pending Home Sales Subdued – NMP Skip to main content

Affordability, Low Inventory Keep Pending Home Sales Subdued

Feb 20, 2026
Pending Home Sales Subdued
Managing Editor

NAR reports pending home sales fell 0.8 % in January amid tight inventory, affordability challenges, and rising household costs, signaling continued caution among prospective buyers heading into spring

Pending home sales in the U.S. edged downward at the start of 2026, with the latest National Association of Realtors (NAR) Pending Home Sales Report finding a 0.8 % decline in January compared with December, and a modest 0.4 % year‑over‑year decrease.

The Pending Home Sales Index, a forward‑looking indicator based on contracts signed but not yet closed, fell to 70.9 in January, signaling subdued buyer activity heading into the spring season. Contract signings are often viewed as a precursor to existing home sales in the subsequent months.

Regionally, January’s results were uneven, with pending sales rising in the Midwest and West, while contract activity in the Northeast and South declined on a month‑to‑month basis. Year‑over‑year comparisons showed increases in the South and West, but continued weakness in the Northeast and Midwest.

Despite mortgage rates hovering around the low 6 % range in January, affordability challenges and limited inventory have dampened market momentum. 

“Unless housing supply increases, these additional potential buyers becoming active in the market could simply push up home prices,” said NAR Chief Economist Dr. Lawrence Yun. “This will put increasing pressure on affordability, which is why it is critical to increase supply by building more homes. Fortunately, the House of Representatives recently passed the Housing for the 21st Century Act with strong bipartisan support, an important signal that addressing the nation’s housing shortage remains a shared priority. The legislation is a meaningful step toward expanding housing supply and removing barriers that make it harder for Americans to achieve homeownership.”

Seasonal factors and winter weather may have contributed to the modest drop in pending contracts, but analysts say that buyers continue to be cautious amid broader economic uncertainties and historically tight housing inventories.

Affordability issues linger for most potential buyers, as doxo’s recently released 2026 U.S. Household Bill Pay Report found that U.S. households are spending a record $5.03 trillion annually on recurring bills, underscoring mounting financial pressure driven largely by housing costs, rising insurance premiums, and essential utilities.

The report found the typical U.S. household pays $39,468 per year — or $3,289 per month — on bills, consuming roughly 47% of annual income. Of that total, $24,997 annually goes toward the 13 most essential household expenses, including housing, auto loans, utilities, and insurance.

About the author
Managing Editor
NMP Managing Editor Eric C. Peck has 25-plus years’ experience covering the mortgage industry. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he…
Published
Feb 20, 2026
More Buyers Expect Higher Rates. Fewer Would Wait.

Veterans United’s survey finds less willingness to hold out for lower rates, but little change in purchase timelines

Oct 22, 2026
Mortgage Rate Lock-In: More High-Rate Loans, Few Signs Of A Thaw

With 30-year rates above 7% and nearly half of outstanding loans below 4%, originators face a stubborn obstacle to rebuilding repeat-buyer pipelines

Oct 22, 2026
Investor Homebuying Slows, Small Buyers Claim Biggest Share In 15 Years

Smaller investors accounted for 66.2% of investor purchases in the first half of 2026 and relied on cash much less often than mega-investors

Oct 22, 2026
California Home Sales Drop 6.5%, Prices Keep Climbing

September’s decline leaves originators competing for fewer purchases, while rising borrowing costs and limited new listings keep affordability under pressure

Oct 20, 2026
One In Three Americans Blame Lenders For Housing Crisis Ahead Of Midterms

Voters want lower taxes, insurance costs, and mortgage rates, but 63% doubt the election will improve housing

Oct 20, 2026
Rates Above 7% Shrink Buyer Budgets In Loosening Housing Market

Realtor.com finds 66 of 99 metros favor buyers or are moving that way, while rising financing costs have cut borrowing capacity 7.2% since late August for a fixed monthly payment

Oct 19, 2026