If you’ve seen headlines saying ‘“home sales fell sharply in January”, it might have made you pause, especially if you’re thinking about selling. But before you jump to conclusions, it’s important to look at the full picture. Context makes all the difference.

Yes, home sales slowed down in January. But that’s pretty typical for this time of year, and winter weather often plays a role. It’s not a sign that buyers have suddenly disappeared.

What’s Really Behind the Decline?

Reports from the National Association of Realtors say the pace of home sales fell about 8.4% last month compared to the month before. And yes, that’s accurate. But it’s not necessarily a reason to panic.

Data show sales normally dip in January. Over the past four years, that’s been true every year except one. This year’s decline was steeper than usual, but there’s an explanation for that—more on it in a moment.

It’s normal for home sales to slow down in January. Over the past four years, that’s been the case every time except once. This year’s drop was a bit sharper than usual, but there’s a clear reason for it. I’ll explain more in a moment.

The part the headlines don’t usually mention is this: home sales usually start picking up again in February as the spring market gets going. You can see that in the green bars below.

Even though the market slowed down briefly, it should start picking back up soon.

And if you’re wondering why prices fell more this year even though mortgage rates are lower than last year, here’s the explanation from Realtor.com.

““Winter storm Fern, which dumped snow and ice across large swaths of the country, likely disrupted some closings, weighing on the data and making it difficult to pick out the housing market momentum trend from the weather noise.”
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— Realtor.com

This January, widespread winter weather affected 40 states, according to the National Weather Service. In real estate, that kind of weather tends to slow momentum. Here’s why.

Existing home sales data only counts completed transactions, not new contracts. So if inspections, appraisals, or final walk-throughs get delayed by bad weather, those closings usually just get pushed into the next month rather than falling through, especially when buyers and sellers are motivated to keep moving forward.

Will Home Sales Pick Back Up?

January’s missing sales are more likely “postponed” rather than “lost.” They haven’t disappeared, they’re just taking a bit longer to close.

The rest of the data still shows a market that’s gaining momentum as we head into spring.

Affordability has improved for the seventh month in a row, and buyers are regaining negotiating power in many markets across the country. This single monthly report doesn’t mean buyers aren’t active, it just suggests that, as the weather warms up, activity is likely to pick up.