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US Home Sales Surge Defies Expectations

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  Published in Business and Finance on Wednesday, January 14th 2026 at 12:53 GMT by reuters.com

Washington, D.C. - January 14th, 2026 - Defying widespread expectations of continued decline, US existing home sales experienced a surprising surge in December, signaling a potential stabilization of the housing market. The National Association of Realtors (NAR) reported a 2.2% increase from November, bringing sales to an annual rate of 3.79 million units - the highest figure seen since May 2025. This performance significantly exceeded economists' forecasts, which anticipated a decrease to 3.68 million units.

A Delicate Recovery Amidst Ongoing Challenges

The unexpected uptick provides a much-needed glimmer of hope for a sector that has been facing headwinds for several months. While sales remain down 14.5% compared to December 2024, the rebound suggests that the persistent downturn may be easing. Lawrence Yun, chief economist at NAR, characterized the data as indicative of market stabilization. "Lower mortgage rates are helping to bring buyers back into the market, and affordability is improving," Yun stated, highlighting the primary drivers behind this surprising resilience.

The Rate Factor and Evolving Affordability

The significant drop in mortgage rates has been instrumental in invigorating buyer interest. After peaking above 7% in October 2025, the average 30-year fixed mortgage rate has decreased to approximately 6.30%. This reduction, fueled by evolving economic indicators and Federal Reserve policy adjustments, has eased the financial burden on potential homebuyers, making homeownership more attainable.

Analysts are now closely watching the Federal Reserve's future decisions regarding interest rates. A continued downward trend in rates could further stimulate the housing market, while any increases could quickly dampen the recent momentum. Early discussions suggest the Fed will prioritize monitoring inflation data to guide its subsequent actions.

Inventory Remains the Stumbling Block

Despite the positive sales figures, the persistent lack of inventory continues to be a significant challenge. While the number of previously owned homes for sale rose to 1.35 million in December, this figure remains substantially below pre-pandemic levels. This limited supply is contributing to upward pressure on prices and is restricting the potential for a more robust recovery.

New construction efforts are underway across the nation, but construction timelines remain lengthy, hampered by supply chain issues and labor shortages that persist from prior years. Government initiatives aimed at boosting housing construction are being scrutinized for their effectiveness and long-term impact.

Price Trends and Market Velocity

The median existing home price in December reached $382,600, representing a modest 0.3% increase compared to the previous year. While this indicates price appreciation, the rate is considerably slower than the rapid price growth witnessed during the peak of the pandemic-era housing boom. The average time a property remained on the market decreased to 25 days, a stark contrast to the 41 days recorded in December 2024. This shorter time on market signals increased buyer demand and a shift towards a more competitive environment, albeit one constrained by limited inventory.

Looking Ahead: A Cautiously Optimistic Outlook

The December data offers a nuanced perspective on the US housing market. While the unexpected sales surge is a positive development, the underlying challenges--particularly the inventory shortage--remain. The market's trajectory in the coming months will depend heavily on factors such as mortgage rate fluctuations, inflation data, and the ongoing pace of new home construction. The current stabilization, if sustained, could pave the way for a more balanced and sustainable housing market in 2026, but caution and vigilance remain crucial.