December’s sales surge offered relief, but tight supply still capped momentum
Existing-home sales closed out 2025 on an upswing, giving lenders and brokers a rare dose of good news after a bruising year.
The National Association of Realtors (NAR) reported that December sales rose 5.1% from November to a seasonally adjusted annual rate of 4.35 million. That's the strongest pace in nearly three years, while edging 1.4% higher than a year earlier.
The rebound came as mortgage rates eased and price growth slowed. The average 30-year fixed rate in December stood at 6.19%, down from 6.72% a year earlier, according to Freddie Mac.
At the same time, the median existing-home price for all housing types reached $405,400, just 0.4% above December 2024 – marking the 30th straight month of annual price gains.
“2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” NAR chief economist Lawrence Yun said.
“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. The gains were broad-based, with all four major regions improving from the prior month.”
The apparent turning point for demand still met a stubborn constraint on supply. Total inventory in December stood at 1.18 million units, down 18.1% from November but up 3.5% from a year earlier, representing 3.3 months’ supply at the current sales pace.
“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.”
Regionally, the South led December’s gains, with existing-home sales up 6.9% month over month and 3.6% year over year. The Northeast and Midwest both posted 2% monthly increases, while the West rose 6.6%. Single-family sales climbed 5.1% in December, with a median price of $409,500, while condo and co-op sales rose 5.3% as the median price hit $364,400.
For mortgage professionals, the report reinforced a broader pattern throughout 2025 – sporadic bursts of demand in response to rate moves, followed by renewed cooling as inventory and affordability constraints reasserted themselves.
Earlier in the cycle, an “unexpected jump in February” existing-home sales was followed by a weak March print, underscoring how fragile buyer confidence remained in a rate-sensitive market. The December data did not resolve those structural pressures, but it did suggest that even modest rate relief could unlock sidelined demand.
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