Home Sales: A Glimpse of Hope in 2025

December Sales Surge

In the last month of 2025, the housing market displayed unexpected resilience. Sales of existing homes accelerated, reaching a seasonally adjusted annual rate of 4.35 million units. This marked a significant increase from November and surpassed expert predictions.

Yearly Overview

Throughout the year, the total number of homes sold remained consistent with 2024 levels. December's sales were the highest in nearly three years, with all regions experiencing a month-over-month increase. However, the South and West trailed behind compared to the same period last year.

Mortgage Rates and Buyer Challenges

The reported sales reflect deals likely finalized a couple of months earlier when mortgage rates stabilized around 6.2% to 6.3%. While this was an improvement from earlier in the year, it still posed challenges for many buyers.

Market Trends and Pricing

The year 2025 was particularly difficult for homebuyers, with record-high prices and record-low sales. However, towards the end of the year, the market began to show signs of improvement. Mortgage rates dropped, and the rapid pace of home price increases started to decelerate.

Inventory and Price Dynamics

One significant issue was the limited number of homes available for sale. By the end of December, inventory decreased from November but was higher than the same time last year. With more homes being sold, the supply tightened further, preventing a substantial drop in prices.

The average price of a home sold in December was just over $405,000, a slight increase from the previous year. This marked the 30th consecutive month of annual price gains, although the increase was smaller than the previous month.

Future Outlook

Homeowners appear to be in no hurry to sell, taking their time to decide when to list their homes. More inventory is expected to enter the market starting in February, following typical seasonal patterns.