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Existing-Home Sales Conclude 2025 on a Positive Note
Despite a challenging housing market faced with record-high prices and low sales, existing-home sales showed a glimmer of hope as they capped off 2025. According to the National Association of Realtors (NAR), existing-home sales bounced back with a month-over-month increase of 5.1% in December. However, in the grand scheme of things, the annual total still fell short of the previous year’s performance by a marginal 1,000 units, making 2025 the most sluggish year for home transactions since 1995.
Breaking Down the Numbers
Sales for 2025 reached a humble 4.061 million homes, barely trailing behind 2024’s figure of 4.062 million. The NAR's Chief Economist, Lawrence Yun, stated that, despite these difficulties, the market in the fourth quarter began to show signs of recovery with improved conditions thanks to lower mortgage rates and a slower pace of home price growth. In fact, December experienced its strongest sales levels in almost three years, demonstrating the potential for revival in the market.
Inventory Challenges Persist
While the December sales boost created visible optimism, it also highlighted the inventory shortage that continues to plague the market. Total available homes for sale dropped by 18.1% in December, leaving only 1.18 million units and representing just a 3.3-month supply at the current sales pace. As fewer sellers are motivated to list their homes, the expectation is that more inventory will start flowing onto the market around February, a trend consistent with historical patterns.
Looking Ahead: What 2026 Might Hold
Economists express cautious optimism for the upcoming year. Danielle Hale, Chief Economist at Realtor.com, forecasts that the prevailing lower mortgage rates and modest home price growth will help foster a more favorable environment for homebuyers in 2026. With the groundwork laid by improving affordability, there’s a generally positive outlook for heightened sales—but whether this translates to a significant rebound remains to be seen.
Concrete Strategies for Navigating the Market
For potential buyers and investors eyeing commercial space, understanding these trends is vital. Lower mortgage rates might present a strategic entry point, especially for those ready to act during peak inventory release periods. Furthermore, keeping abreast of local market conditions will empower buyers to leverage negotiations more effectively as they navigate the transition into a possibly more favorable housing climate in 2026.
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