Home sales last year were tied for the lowest level in 3 decades

Core Insights - The housing market experienced its third consecutive year of stagnation, with 4.06 million homes sold in 2025, unchanged from the previous year, marking the lowest sales level since 1995 [1] - High mortgage rates and prices have deterred buyers and discouraged sellers from listing their homes, creating a challenging environment for first-time buyers [1] - The average existing home sales historically hover around 5 million annually, but the market has been disrupted since mid-2022 due to rapidly rising mortgage rates [1] Market Trends - Toward the end of 2025, mortgage rates around 6.2% helped to attract some buyers back into the market [2] - Home sales showed a positive trend, rising 5.1% in December from the previous month, reaching a seasonally adjusted annual rate of 4.35 million, the best performance since February 2023 [3] - Sales increased across all regions, with the South leading with a 6.9% increase and the West following with a 6.6% rise [4] Future Outlook - There are indications that the recent increase in sales may persist, particularly if mortgage rates remain near 6% [5] - Home contract signings rose by 3.3% in November, suggesting potential future sales growth [5] - Mortgage applications for home purchases surged by 16% compared to the previous week, following a brief drop in average 30-year mortgage rates below 6% [6] - Experts predict that lower mortgage rates will lead to increased home sales in 2026 [6]