A December rebound in existing home sales signaled improving conditions late in the year, though economists say affordability pressures and tight inventory continue to constrain the housing market.
By yourNEWS Media Newsroom
U.S. existing home sales recorded their largest monthly increase in nearly three years in December, rising 5.1% from November, according to a Jan. 14 report from the National Association of Realtors. The gain capped a modest year-end improvement after a prolonged period of historically low sales activity.
On a year-over-year basis, December sales were up 1.4%, marking one of the few annual increases seen during the past year. NAR Chief Economist Lawrence Yun said the fourth quarter showed early signs of stabilization following a difficult period for buyers.
“2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” Yun said in the report. “However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth. December home sales, after adjusting for seasonal factors, were the strongest in nearly three years.”
Despite the month’s gains, overall sales levels remain subdued. Jeff Ostrowski, a housing market analyst at Bankrate, said the improvement should be viewed in context.
“They are still near historic lows—an annual pace of 4.35 million home sales in December 2025,” Ostrowski said in comments to The Epoch Times. “For context, during the pandemic, home sales were well above 6 million a year, and a typical year before the pandemic saw more than 5 million sales.”
Sales rose month over month in every region of the country. The South and West each posted gains of more than 6%, while the Northeast and Midwest saw increases of more than 2%. Year over year, however, results were mixed: sales increased in the South, were flat in the Midwest and West, and declined in the Northeast.
Home prices continued to edge higher. The median price for single-family homes reached $409,500 in December, a 0.2% increase from December 2024. Across all housing types—including condos, co-ops, and multifamily properties—the median price was $405,400, up 0.4% from a year earlier. December marked the 30th consecutive month of year-over-year price increases for all housing types.
“Affordability remains a challenge, especially for first-time buyers,” Ostrowski said. “A recent dip in mortgage rates might help some buyers get into the market, but home prices remain stuck at record highs.”
Housing inventory declined sharply on a monthly basis, falling more than 18% from November to December, though it was up 3.5% compared with December 2024. The national housing supply stood at 3.3 months at the end of December, down from 4.2 months in November but slightly above the 3.2 months recorded a year earlier.
“Inventory levels remain tight,” Yun said. “With fewer sellers feeling eager to move, homeowners are taking their time deciding when to list or delist their homes. Similar to past years, more inventory is expected to come to market beginning in February.”
Ostrowski said the seasonal pullback reflected ongoing market hesitancy. “The inventory of homes for sale plunged 18 percent from November to December as the lock-in effect remained in place and soft prices caused sellers to pull their homes off the market,” he said.
Regional price differences remained pronounced. The West recorded the highest median single-family home price at $605,600, though that figure was down 1.4% from December 2024. The Northeast followed at $496,700, up 3.7% year over year. In the South, the median price slipped 0.3% to $360,200, while the Midwest remained the most affordable region, with a median price of $306,000, up 3.1% from a year earlier.
Sales of condos and co-ops rose 5.3% month over month in December, though they were down between 2.4% and 2.5% from December 2024. Median prices for these properties increased 1.5% year over year to $364,400.
Mortgage rates eased modestly during the period. According to Freddie Mac, the average rate on a 30-year fixed-rate mortgage stood at 6.16% as of Jan. 8. The average rate in December was 6.19%, down from 6.24% in November and 6.72% one year earlier.
Economists said the combination of slightly lower rates and slower price growth helped lift activity at year’s end, but they cautioned that sustained recovery will depend on improved affordability and a meaningful increase in housing supply.
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