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Housing Market Defies Expectations with Strong December Sales

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  Published in Business and Finance on Wednesday, January 14th 2026 at 12:48 GMT by HousingWire

Washington, D.C. - January 14th, 2026 - The U.S. housing market continues to present a surprising picture of resilience, with December 2025 existing-home sales reaching a three-year high. Data released today by the National Association of Realtors(R) (NAR) reveals sales increasing for the third consecutive month, bucking predictions of a typical seasonal slowdown. This unexpected performance, coupled with ongoing price appreciation, suggests a possible, albeit cautiously optimistic, rebound in the market for 2026.

The December figures paint a compelling picture: 4.82 million homes were sold, representing a significant 3.5% increase month-over-month (equivalent to 164,000 additional homes) and a 3.1% year-over-year gain. The median home price settled at $382,700, showing a moderate 2.6% year-over-year increase. While still a significant cost for many, the rate of price appreciation has slowed considerably compared to the rapid increases seen earlier in the decade.

Mortgage Rate Influence & Inventory Concerns

Lawrence Yun, NAR's vice president and economist, attributed the surprising strength in December's sales to the moderation of mortgage rates during the month. While still higher than the historically low rates of the early 2020s, the recent easing has clearly provided a boost to buyer activity. "The slight dip in rates unlocked pent-up demand," Yun stated in a press conference earlier today. "Many potential buyers who had been sidelined by affordability concerns felt comfortable re-entering the market."

However, Yun reiterated a long-standing concern: the persistent lack of housing inventory remains a crucial impediment to broader market recovery. The current inventory level of 1.42 million homes represents a slight improvement over November (1.35 million), and the months' supply has edged up to 3.2 from 3.0. This still indicates a seller's market, albeit a less intense one than previously experienced. "The market is clearly thirsty for more supply," Yun emphasized. "New construction and existing homeowners listing their properties are essential to satisfy the ongoing demand and alleviate price pressures."

Regional Performance - A Mixed Bag

The regional performance data showed a divergence in trends. The Midwest and West regions experienced sales increases, demonstrating localized strength. The Midwest saw a notable 7.6% rise, while the West recorded a 6.3% increase. Conversely, the Northeast and South regions experienced declines of 1.9% and 0.7% respectively. Analysts suggest this reflects varying economic conditions and local housing market dynamics within each region.

"Regional variations are always expected, and they underscore the localized nature of real estate," commented Anya Sharma, a senior analyst at Capital Economics. "While the national figures are encouraging, it's crucial to monitor these regional trends to understand the nuances of the recovery."

Looking to 2026: Cautious Optimism

NAR's forecast for 2026 anticipates a continued, albeit modest, rebound in home sales. They project sales to reach 4.8 million, closely mirroring the December 2025 performance, with a slight appreciation in the median home price. This projection hinges on several key factors, primarily the anticipated increase in housing inventory.

Analysts believe the expectation of increased inventory is based on several trends, including more homeowners feeling comfortable listing their properties as mortgage rates stabilize, and continued progress in new construction projects, although construction remains hampered by supply chain issues and skilled labor shortages. However, the trajectory of mortgage rates will be a critical determinant of the market's overall performance. Any significant increase in rates could dampen buyer enthusiasm and slow down the recovery.

"While we are cautiously optimistic about 2026, it's important to remain realistic," Yun concluded. "The housing market is complex and subject to numerous economic influences. Close monitoring of these factors will be key to navigating the year ahead." The market will be watching closely to see if the momentum from December can carry through into the new year and truly signal a broader housing market recovery.