Existing-home sales jumped 5.1% in December, reaching a seasonally adjusted annual rate of 4.35 million, according to the National Association of Realtors (NAR). As Lawrence Yun, chief economist for the NAR, noted, “December home sales, after adjusting for seasonal factors, were the strongest in nearly three years.” Compared to December 2024, sales rose 1.4%, pointing to improving momentum as the market heads into 2026.

Prices Cool, Improving Affordability

The median existing-home price across all housing types was $405,400 in December, a modest 0.4% increase from one year earlier and the 30th consecutive month of annual gains. While prices continue to rise, the pace of appreciation has slowed notably compared to recent years. This moderation—paired with mortgage rates that eased late in 2025—is beginning to improve affordability conditions, particularly for buyers who previously paused their search amid rapid price growth and higher borrowing costs.

Inventory Tightens Sharply

Housing supply contracted significantly in December, with total inventory falling 18.1% from November to 1.18 million homes. This represents a 3.3-month supply, down from 4.2 months the prior month and only slightly above last year’s level. Yun has emphasized that inventory remains tight, as many homeowners are in no rush to list—particularly during the winter months. Historically, additional listings begin to come to market in February, which could help ease pressure as the spring season approaches.

Market Gains Momentum

Looking ahead, December’s strong showing suggests the housing market may be entering 2026 on firmer footing. Lower mortgage rates, steady wage growth, and moderating price gains are creating a more navigable environment for buyers while sellers continue to benefit from limited inventory. While 2025 proved challenging for many households, improving conditions late in the year—and December’s performance in particular—may signal a more constructive path forward.

Regional Sales Snapshot

• Northeast: 520,000 existing-home sales (+2% MoM, -1.9% YoY) | Median Price: $496,700 (+3.7%)

• Midwest: 1 million existing-home sales (+2% MoM, 0% YoY) | Median Price: $306,000 (+3.1%)

• South: 2.02 million existing-home sales (+6.9% MoM, +3.6% YoY) | Median Price: $360,200 (-0.3%)

• West: 810,000 existing-home sales (+6.6% MoM, 0% YoY) | Median Price: $605,600 (-1.4%)