Sales of previously owned homes in the US rose for the third straight month in December, entering 2025 with some momentum after the worst year in nearly three decades.
Contract closings of existing homes last month increased 2.2% to an annualized rate of 4.24 million, the most since February, according to National Association of Realtors data released Friday. That was in line with the estimate of economists surveyed by Bloomberg.
The third straight pickup in monthly sales — the longest streak since late 2021, when mortgage rates were less than half of where they are now — signals that homeowners and buyers alike have come to terms with borrowing costs around 7%. The new-home market also appears to be stabilizing, providing some early signs of optimism for the new year.
“Home sales in the final months of the year showed solid recovery despite elevated mortgage rates,” NAR Chief Economist Lawrence Yun said in a prepared statement.
However, for all of 2024, sales reached the lowest since 1995, when the US had about 70 million fewer people. It marked the third straight annual decline, stretches only ever seen in the 2006 housing crisis as well as the recessions around the early 1980s and 1990s.
The median sale price, meantime, climbed 6% over the past 12 months to $404,400, reflecting more sales activity in the upper end of the market. That helped propel prices for the entire year to a record.
After slowly creeping up for months, inventory dropped 13.5% in December from the prior month — which is typical at the end of the year. It’s still up 16.2% from December 2023.
There was hope that 2024 could be a turning point for the housing market as the Federal Reserve started cutting interest rates. But mortgage rates track government bond yields, which rose nearly a full percentage point toward the end of the year after inflation proved stubborn, fueling concerns that officials eased policy too soon. They’re expected to keep rates steady at next week’s meeting.
Treasury yields are still elevated as investors brace for the cost of President Donald Trump’s policies and price pressures are cooling only somewhat. That’s projected to keep mortgage rates on average above 6% through at least 2027, according to some estimates.
In December, 53% of homes sold were on the market for less than a month, unchanged from November, while 16% sold for above the list price. Properties stayed on the market for 35 days on average, compared with 32 days in the previous month.
Existing-home sales account for the majority of the US total and are calculated when a contract closes. The government will release figures on new-home sales on Monday.
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