Despite a 5.5 million increase in the number of potential buyers who would qualify for a mortgage compared to a year ago, pending home sales in January were roughly flat month over month and year over year, the National Association of REALTORS® said, citing its Pending Home Sales Report.   

Sales were down 0.8% month over month and 0.4% year over year. The increase in newly qualifying borrowers comes from the slow but steady decrease in mortgage rates over the last year, which are approaching 6%, NAR Chief Economist Lawrence Yun said. 

“Most newly qualifying households do not act immediately, but based on past experience, about 10% could enter the market — potentially adding roughly 550,000 new homebuyers this year compared with last year,” Yun said. “Unless housing supply increases, these additional potential buyers becoming active in the market could simply push up home prices. This will put increasing pressure on affordability, which is why it is critical to increase supply by building more homes.” 

By region, month-over-month pending home sales rose in the Midwest and West and declined in the Northeast and South. Year-over-year pending home sales rose in the South and West and declined in the Northeast and Midwest. 

While the topline national numbers were down slightly, several metro areas saw healthy annual gains, including Phoenix (up 11.8%), Boston (10.7%) and Miami (6.8%).