The National Association of Realtors reported that regionally, pending home sales in the Northeast rose 2.3% month-to-month and were 3.6% above 2016. In the Midwest sales fell 5.0% for the month and were 3.8% lower than January 2016. Pending home sales in the South gained 0.4% for the month and up 2% for the year. The West reported sales fell 9.8% for the month and were 0.4% lower than 2016. 
Buyers signed 2.8% fewer contracts to buy existing homes in January compared with December.
“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” said Lawrence Yun, chief economist of the NAR. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it’s not uncommon to see a home come off the market within a month.”
Mortgage rates moved higher after the presidential election and have remained elevated ever since. Home price gains continue to increase with the weaker supply, clearly weighing on affordability. Experts had expected a slight gain for pending home sales, as new supply was expected to come onto the market in January. The supply of homes for sale, however, is still down dramatically compared with a year ago, and demand for homes is rising as employment improves.