Existing Home Sales Surge in December, Ending 2025 on a Strong Note Amid Cooling Prices and Lower Rates

Existing home sales in the United States climbed to a seasonally adjusted annual rate of 4.72 million units in December 2025, according to data released this week. This figure represents an 8.7% increase from November and surpasses the consensus forecast of 4.5 million units, marking the highest monthly level since June of the same year. The December surge follows a trend of gradually easing home prices, which declined 0.9% from the prior month and 2.3% year-over-year, according to the latest National Association of Realtors report. Combined with a drop in the 30-year fixed mortgage rate to 6.2%, down from a peak of 7.8% in late 2024, the environment became more favorable for first-time buyers and cash-constrained homeowners. The rebound in sales was broad-based, with gains in all four major U.S. regions. The Midwest saw the largest increase at 11.2%, followed by the South at 9.4% and the West at 7.8%. The Northeast posted a modest 5.6% rise, still outpacing expectations. Inventory levels also improved, rising 5.1% in December to 1.87 million homes, a 14% increase from the 2024 low point. Market participants interpret the data as a sign of stabilization in the housing sector after two years of stagnation. Analysts note that while affordability remains a challenge, the pace of price declines and sustained lower borrowing costs are beginning to re-engage potential buyers. The Federal Reserve’s recent rate cuts, starting in September 2025, are widely seen as a catalyst for the recent improvement, though concerns remain over long-term affordability and regional disparities.