A “tough” year for the resale US housing market ended on a high note, data released on Wednesday suggested.
Existing home sales rose more than 5% in December, beating every estimate and pushing the annualized rate, which spent the better part of 2025 loitering at hopelessly subdued levels, to the highest since March of 2023.
Last month’s gain was the fourth straight. The last time this series notched that many consecutive monthly advances was 2020.
Remember, these are actual closings, not just contract signings. So, done deals, if you like.
“2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” NAR Chief Economist Lawrence Yun said, in the editorial accompanying the release. “However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth.”
As ever, any reference to an “improvement” in buying conditions is relative. This remains a highly forbidding environment for regular people. Even if rates fall precipitously further (which seems unlikely outside of a recession), the downpayment burden will remain.
The median existing home price in December was $405,400, high to be sure, but up a mere 0.4% from the same period a year ago.
We’re on the brink of annual price depreciation, but after 30 straight increases (not to mention the enormous rally occasioned by the original pandemic housing boom), a series of marginal declines isn’t going to be a lot of help for cash-strapped borrowers.
The Trump administration’s just throwing things at the wall to see what sticks these days. First it was 50-year mortgages, now it’s expelling private equity from the single-family housing market and compelling the GSEs to buy mortgage bonds.
Separately, the MBA said applications — both refis and purchase apps — surged compared to the holiday-distorted prior week, jumping nearly 29%. The purchase-only index posted a 16% advance, the largest since the same week a year ago.
The 30-year fixed fell to 6.18%, down 7bps over the prior week and 14bps since late last month.
“Mortgage rates dropped last week following the announcement of increased MBS purchases by the GSEs,” MBA VP Joel Kan remarked. “Lower rates sparked an increase in refinance applications.”
Meanwhile, over at Redfin’s always informative news and analysis section, Dana Anderson spent a few minutes documenting the initial reaction to Trump’s GSE gambit.
“The daily average mortgage rate dropped to 5.99% on January 9, the lowest level in nearly three years, in the wake of President Trump’s order,” she wrote, adding that as a result, “a homebuyer on a $3,000 monthly budget has gained roughly $14,000 in purchasing power since one month ago.”
