December 2025 Housing Market

Key Market Trends at a Glance

• Mortgage Rates: Rates have eased from their early 2025 peaks, generally hovering around the mid-6% range (the average 30-year fixed rate was around 6.19% in early December). This is a relief from rates near or above 7% seen earlier in the year, offering slightly lower monthly payments and drawing some sidelined buyers back in.
• • Inventory: The supply of homes for sale has increased, growing for 24 consecutive months in some reports, with active listings up by double digits in many regions compared to a year ago. More options mean less frenzied competition and longer selling times (median time on market is about 63 days), which benefits buyers.
  • Home Prices: The pace of price growth has significantly slowed or even flattened nationally, with some regions seeing slight year-over-year declines. While prices remain high overall, the slowdown offers buyers more negotiation power and a greater chance of accepted offers without bidding wars.

  The Buyer’s Resurgence: A Balanced, Not Dominant, Market

  This shift doesn’t signal a buyer’s market across the board, but rather a more balanced environment where negotiation is possible again.
• • More Negotiation Power: Buyers are now more likely to see price reductions (over 20% of listings had price cuts in October 2025) and can reasonably ask for contingencies like inspections and appraisals, which were often waived during the bidding frenzies of 2021-2022.
  • Motivated Sellers: Homeowners who need to sell by year-end may be more flexible on price and terms to close a deal before January 1, offering a strategic window of opportunity for serious buyers.
  • Builder Incentives: New construction remains a relatively strong option, with builders frequently offering incentives like mortgage rate buydowns and closing cost credits to attract buyers and compete with the existing home market.

  The Lingering Challenges

• Despite the positive trends for buyers, significant hurdles remain:
  • Affordability Squeeze: Even with moderating prices and rates, homeownership affordability remains a major concern, still much worse than pre-pandemic levels. High prices coupled with rates in the 6% range continue to price many first-time and moderate-income buyers out of the market.
  • Persistent Inventory Shortage: While inventory is up, it still sits below historical norms. The “rate lock effect” (homeowners not wanting to give up their low pandemic-era mortgage rates) continues to limit the total number of available homes.
  • Local Variations: National data only tells part of the story. High-income metro areas like New York and Boston may still see strong demand and price gains, while more affordability-challenged markets in the Sunbelt might experience price dips.
  In conclusion, the end of 2025 presents a market that is more rational and less heated than previous years. It demands a strategic approach from buyers who must focus on local dynamics, leverage their newfound negotiating power, and be financially prepared to act when the right opportunity arises.

• December 2025 Housing Market

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      • Some of the links in this description and in our videos may be affiliate links, and pay a small commission if you use them, but never increase the basic cost. I really appreciate the support. The content in my Youtube videos SHALL NOT be construed as tax, legal, insurance, construction, engineering, health & safety, electrical, financial advice, or other & may be outdated or inaccurate; it is your responsibility to verify all information. I am a not financial adviser. I only express my opinions based on my experiences. Your experience may be quite different. Investing of any kind involves risk. While it is possible to minimize risk, your investments are solely your responsibility. You must conduct your own research. There is NO guarantee of gains or losses on any investments. My produced videos are for entertainment purposes ONLY.  DO NOT make buying or selling decisions based on these videos. If you need advice, please contact a qualified CPA, attorney, insurance agent, contractor/electrician/engineer, financial advisor, or the appropriate professional for the subject you would like help with.
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