Bad news. More bad news. More more bad news.

Pending home sales in the US dropped sharply in January, according to Thursday’s update, capping a string of underwhelming readouts from America’s tortured housing market.

The 4.6% drop in contract activity was the biggest decline since April and the second monthly decline of 4% or more.

As the figure suggests — and without wanting to go overboard on the hyperbole — the situation appears to be deteriorating fairly rapidly. The index now sits at a record low.

Again, this is contract signings (not closings), and not all signed contracts will result in actual sales (some will fall through). So when contract activity’s deteriorating, there’s a sense in which it bodes especially ill.

Recall that more than 40,000 deals were called off in December, equivalent to 16% of homes that went under contract, according to Redfin.

Earlier this week, government data suggested new home sales fell more than 10% last month, while a separate NAR report showed existing home sales fell in January by the most since 2022. Builder sentiment’s abysmal, and mortgage apps have slowed despite lower rates.

Naturally, NAR chief economist Lawrence Yun — God bless him — blamed the weather for the decline in contract activity, or at least suggested it might’ve been a factor. “It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, if so, expect greater sales activity in upcoming months,” he said.

Yun did concede that affordability challenges may have more explanatory power at this point than cold weather in January. “It’s evident,” he went on, “that elevated home prices and higher mortgage rates strained affordability.”