U.S. existing home sales gained momentum in December, supported by easing mortgage rates and a slowdown in house price growth.
Sales of previously owned homes rose 5.1% last month to a seasonally adjusted annual rate of 4.35 million units, according to the National Association of Realtors. The result exceeded economists’ expectations of 4.21 million units, based on a Reuters poll, and marked a 1.4% increase from a year earlier.
“In the fourth quarter, market conditions started to improve as mortgage rates fell and home price growth moderated,” said Lawrence Yun, the NAR’s chief economist. He added that housing supply remains constrained, as many homeowners are hesitant to list their properties and are taking more time to decide when to sell.
Mortgage rates declined during 2025, although they are still well above levels seen three years ago. Last week, President Donald Trump directed the Federal Housing Finance Agency—which oversees Fannie Mae and Freddie Mac—to purchase $200 billion in bonds issued by the two firms in an effort to push borrowing costs lower.
Analysts expect the impact of these purchases on mortgage rates to be limited, as rates continue to track the benchmark 10-year Treasury yield and remain relatively high.
Housing supply showed modest improvement. The inventory of existing homes increased 3.5% from a year earlier to 1.18 million units in December. At the current sales pace, that represents a 3.3-month supply, up slightly from 3.2 months a year ago.
Home price growth also remained subdued. The median price of an existing home edged up 0.4% from a year earlier to $405,400. Trump has also floated a proposal to restrict institutional investors from purchasing single-family homes, aiming to improve affordability for individual buyers.
