A nearly 10 percent monthly decline in contract signings highlights continued strain in the U.S. housing market, according to new industry data.
By yourNEWS Media Newsroom
Pending home sales in the United States fell sharply at the end of 2025, signaling renewed weakness in the housing market as limited inventory and affordability pressures weighed on buyers.
Contract signings dropped 9.3 percent from November to December, according to the National Association of Realtors’ Jan. 21 pending home sales report. The data also showed pending sales were down 3 percent compared with December 2024.
“The housing sector is not out of the woods yet,” NAR chief economist Lawrence Yun said in the report. “After several months of encouraging signs in pending contracts and closed sales, the December new contract figures have dampened the short-term outlook.”
All four major U.S. regions recorded month-over-month declines. The Midwest experienced the steepest drop, with pending sales down 14.9 percent, followed by the West at 13.3 percent, the Northeast at 11 percent, and the South at 4 percent.
On a year-over-year basis, the South was the only region to post an increase, rising 2 percent. The Midwest recorded the largest annual decline at 9.8 percent, followed by the West at 5.1 percent and the Northeast at 3.6 percent.
Yun noted that December typically sees slower activity due to holidays, vacations, and winter weather, adding that upcoming data will help clarify whether the slowdown reflects a temporary dip or a broader trend. “We’ll be watching the data in the coming months to determine whether the soft contract signings were a one-month aberration or the start of an underlying trend,” he said.
While closed sales increased in December, new listings failed to keep pace, pushing available inventory to its lowest level of the year. Only 1.18 million homes were on the market nationwide, marking the lowest inventory level recorded in 2025.
“Consumers prefer seeing abundant inventory before making the major decision of purchasing a home,” Yun said. “So, the decline in pending home sales could be a result of dampened consumer enthusiasm about buying a home when there are so few options listed for sale.”
Despite the national decline, several metropolitan areas posted notable year-over-year gains. Among the nation’s 50 largest metro markets, Louisville–Jefferson County, Kentucky–Indiana, led with a 23.8 percent increase in pending sales. Other metros showing gains included San Antonio–New Braunfels, Texas, up 13.6 percent; Virginia Beach–Chesapeake–Norfolk, Virginia–North Carolina, up 11 percent; Charlotte–Concord–Gastonia, North Carolina–South Carolina, up 9.7 percent; and Boston–Cambridge–Newton, Massachusetts–New Hampshire, up 9.2 percent.
Meanwhile, a widening imbalance between sellers and buyers is reshaping market dynamics. Redfin recently reported that there were an estimated 47.1 percent more home sellers than buyers nationwide in December, the largest gap since 2013. Redfin defines a buyer’s market as one with more than 10 percent additional sellers than buyers.
“Of course, it’s only a buyer’s market for those who can afford to buy,” the Redfin report stated, citing high housing costs and economic uncertainty as factors discouraging buyers.
Austin, Texas, showed the largest imbalance among major metros, with roughly 128 percent more sellers than buyers. Fort Lauderdale and Miami, Florida, followed at 125 percent and 103 percent, respectively, while Nashville, Tennessee, posted a gap of 111 percent, and San Antonio, Texas, 103 percent.
In Dallas, where sellers outnumbered buyers by nearly 87 percent, median home prices fell 7.6 percent year over year, the steepest decline among the top 50 metro areas.
“Homebuyers are backing off due to stubbornly high home prices and mortgage rates, layoffs, and mounting economic and political uncertainty,” the Redfin report noted. “Sellers, many of whom are buyers themselves, are backing off in response to lackluster demand for their homes.”
Additional indicators point to slower market movement. NAR’s Realtors Confidence Index showed homes spent a median of 39 days on the market in December, up from 36 days in November and 35 days a year earlier. First-time buyers accounted for 29 percent of sales, down slightly from November and from 31 percent in December 2024.
Cash purchases made up 28 percent of transactions, edging up from November and matching last year’s level. Individual investors and second-home buyers represented 18 percent of sales, unchanged from November but higher than the 16 percent recorded a year earlier.
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