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Existing home sales in the United States accelerated in December, supported by easing mortgage rates and slower growth in house prices, according to data released by the National Association of Realtors. Sales rose sharply on a monthly basis and exceeded market expectations, while annual growth also turned positive. Improving conditions in the final quarter of the year were attributed to reduced borrowing costs and more moderate price increases, although housing inventory remained constrained. Mortgage rates declined during 2025 but continued to stay well above levels seen three years earlier. Inventory levels showed a marginal improvement, while median home prices recorded only modest annual growth, reflecting ongoing affordability pressures.
Existing home sales in the United States gathered momentum in December, helped by lower mortgage rates and a moderation in house price growth, according to data released earlier this week by the National Association of Realtors (NAR). Advertisement
Home resales rose by 5.1 per cent during the month to a seasonally adjusted annual rate of 4.35 million units. This was higher than market expectations, as economists surveyed by Reuters had projected sales to increase to an annual rate of 4.21 million units. On a year-on-year basis, existing home sales increased by 1.4 per cent.
The NAR said housing market conditions began to show improvement during the final quarter, supported by easing mortgage rates and a slower pace of house price growth. However, it noted that inventory levels remained tight, as fewer homeowners were willing to sell, with many taking more time to decide when to list or withdraw their properties from the market.
Mortgage rates declined over the course of 2025, although they remained significantly higher than levels seen three years earlier. The US administration recently directed the Federal Housing Finance Agency, which oversees mortgage finance firms Fannie Mae and Freddie Mac, to purchase USD 200 billion worth of bonds issued by the two entities. The move is aimed at easing borrowing costs and bringing mortgage rates down.
Market analysts, however, expect the bond purchases to have only a limited impact. Mortgage rates continue to track the benchmark 10-year US Treasury yield and remain elevated despite recent policy measures.
Housing inventory showed a modest improvement. The stock of existing homes available for sale increased by 3.5 per cent from a year earlier to 1.18 million units in December. At the current pace of sales, it would take around 3.3 months to exhaust the available inventory, compared with 3.2 months during the same period last year.
Price growth remained subdued. The median price of an existing home rose by 0.4 per cent on an annual basis to USD 405,400 in December, reflecting slower appreciation compared with previous years.
In a separate policy proposal, the US administration has suggested restricting institutional investors from purchasing single-family homes, with the stated aim of improving housing affordability. The proposal forms part of broader efforts to address rising housing costs amid ongoing supply constraints in the residential market.
Source - Reuters
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