U.S. existing-home sales ended 2025 stuck near a multi-decade low, as homeowners’ mortgage costs stayed elevated and home prices climbed, putting affordability out of reach for many would-be buyers, the National Association of Realtors reported. NAR said sales of previously occupied homes totaled 4.06 million in 2025, a figure that was essentially flat versus 2024 when sales hit the lowest level since 1995. NAR also said existing home sales have fallen on an annual basis since 2022, a slump that stretches back to when mortgage rates began rising from pandemic-era lows.
Pricing remained a major driver of the market’s sluggishness. NAR reported that the median national home price rose 1.7% in 2025 to $414,400. It also said the median price continued to increase through the end of the year, reflecting a sustained upward trend even as buyers weighed the cost of borrowing and the uncertainty around the broader economy. The result, NAR said, was a market where many prospective purchases did not translate into completed sales.
Even so, the year’s final stretch showed some improvement. Lawrence Yun, NAR’s chief economist, said in a statement that conditions began improving in the fourth quarter after a pullback in mortgage rates and slower home price growth. He described 2025 as “another tough year for homebuyers,” marked by “record-high home prices and historically low home sales,” but he pointed to improving conditions late in the year.
That late-year shift showed up in December’s resale activity. NAR said existing home sales in December rose to a seasonally adjusted annual rate of 4.35 million units, which it described as the fastest sales pace in nearly three years. NAR said that was a 5.1% increase from November, and it exceeded what economists expected; FactSet projected 4.14 million sales at the time, according to the report.
Home prices also edged higher at year-end. NAR said the median sales price in December rose to $405,400, up 0.4% from December 2024. NAR said that figure was an all-time high for December and marked the 30th consecutive month with an annual increase in the median sales price. Even with the pickup, NAR said affordability remained especially challenging for first-time buyers who do not have equity from an existing home to bring to the purchase.
At the same time, the supply of homes for sale stayed tight. NAR reported that there were 1.18 million unsold homes at the end of December, a 3.5% increase from a year earlier, but still below levels that were typical before the COVID-19 pandemic. NAR said December’s month-end inventory translated to a 3.3-month supply at the current sales pace, while it said a 5- to 6-month supply is traditionally considered balanced between buyers and sellers.
NAR forecast a rebound in 2026 sales, though other forecasters expect a more modest shift. Yun forecast that existing U.S. home sales would jump 14% this year. Other housing economists’ forecasts referenced in the report range from a 1.7% increase to 9%, reflecting different views on how much mortgage rates and home prices may ease further. The report also noted that economists generally expect mortgage rates to decline during the year, though it said the average rate on a 30-year mortgage was expected to remain above 6%.
Freddie Mac data cited in the report showed mortgage rates easing late in 2025, after remaining elevated for much of the year. The average 30-year mortgage rate closed out the year at 6.15%, the report said, its lowest level since October 2024. That decrease supported the December sales acceleration, but the report said the persistent cost of borrowing could still limit how quickly sales return to more typical levels, especially for homeowners who would need to replace lower-rate loans with new loans at higher rates.
While the Trump administration floated proposals intended to improve housing affordability, the report said some economists believe the proposals would likely have limited impact. In recent weeks, the report said, administration proposals have included a 50-year mortgage, a ban on large investors buying houses, and a plan to lower mortgage rates by spending $200 billion to buy mortgage bonds. The report also pointed to structural constraints that have helped keep supply short, including years of below-average home construction, and it said those factors have contributed to a chronic shortage of homes nationally.
When demand is higher but inventory stays constrained, homes can remain on the market longer, NAR said. NAR’s inventory and supply data suggest that even as mortgage rates have eased from late-year peaks, the combination of price growth, affordability pressure, and limited listing supply will likely keep resale activity below typical pre-pandemic levels going into the spring homebuying season. Yun said the path back to the market requires more inventory and better affordability to convert pent-up demand into actual purchases.