By the end of 2025, the U.S. housing market felt different than it did a year ago. Not easier. Not cheap. Just calmer. The frantic energy that defined earlier years faded, replaced by something more measured. Buyers slowed down. Sellers adjusted expectations. Deals took longer. That shift brought stress for some and relief for others.
Using data from JPMorgan, the National Association of Realtors, CNBC, FRED, and Redfin, this update looks at where the market actually stood in December 2025 and how the full year compared to 2024.
Why Home Prices Stayed So High
One of the biggest frustrations for buyers in 2025 was simple. Prices refused to come down in a meaningful way.
JPMorgan offers a clear explanation. The U.S. relies heavily on 30 year fixed rate mortgages. Millions of homeowners locked in ultra low rates years ago. Moving now would mean trading those rates for much higher payments. That reality kept a huge number of potential sellers on the sidelines.
Joseph Lupton from JPMorgan explained that higher interest rates did not just cool demand. They also reduced supply. Fewer people wanted to sell. With fewer homes coming to market, prices stayed high even though fewer buyers could afford to jump in.
The job market added more friction. Hiring slowed to near recession levels. Job changes usually drive moves. Fewer job changes meant fewer moves. That removed another key source of both supply and demand.
The result is a housing market where the price to income ratio has stayed near historic highs for three straight years. Price growth slowed, but prices themselves stayed stubbornly elevated.
What The Price Data Shows
Looking at the actual numbers helps cut through the noise.
From FRED, the median sale price in December 2025 was $399,950, compared to $402,501 in December 2024. That is a small year over year dip. It does not signal a price collapse. It does show that upward pressure has eased.
According to NAR, the median existing home price in December 2025 was $405,400. That keeps prices near record territory, but the pace of growth clearly slowed compared to prior years.
Redfin’s full year view shows that 2025’s median sales price was about 1.7% higher than 2024, or roughly $7,400 more. Every month in 2025 still beat the same month in 2024, which says a lot about how sticky prices remain.
So compared to the end of 2024, prices at the end of 2025 looked more stable than explosive. Still high. Still not what most buyers wanted. But they were not racing higher.
Homes Are Taking Longer to Sell
Time on market tells you a lot about buyer confidence.
From FRED, median days on market reached 73 days in December 2025, up from 70 days in December 2024. Redfin reports that across all of 2025, homes spent an average of 48.5 days on the market, nearly six days longer than the year before and the longest stretch since the pandemic period.
This slower pace lines up with what agents have been seeing. Buyers are more careful. They are comparing options. They are asking for concessions. They are willing to walk away.
CNBC’s Housing Market Survey shows that more agents now describe their markets as balanced instead of strongly favoring buyers or sellers. That kind of balance usually brings longer decision cycles and fewer rushed offers.
For sellers, longer days on market can feel stressful. For buyers, it brings breathing room. That emotional shift has been one of the quiet changes of 2025.
Sales Finally Found Some Momentum
After a tough year, sales showed real improvement by December.
NAR reported that existing home sales rose 5.1% in December 2025, reaching a seasonally adjusted annual rate of 4.35 million units. That marked the strongest December in nearly three years. Sales increased month over month in all regions. Year over year, the South improved, the Midwest and West were flat, and the Northeast declined.
JPMorgan also noted that existing home sales reached a nearly three year high at the end of the year. New home sales earlier in the fall beat expectations as well.
Mortgage rates played a role here. Redfin shows that rates averaged 6.6% in 2025, slightly lower than 6.7% in 2024. Over the course of the year, rates fell from above 7% to around 6.3% by year end. CNBC reports that rates stayed mostly between 6.2% and 6.4% toward the end of the year.
That drop was not dramatic. Still, it was enough to bring some buyers back, especially those moving because of life changes like jobs, family, retirement, or downsizing. It did not create a surge. It created a steady trickle. After a slow year, that felt meaningful.
Affordability Still Weighs on the Market
Even with better sales numbers, affordability remains the biggest challenge.
JPMorgan points out that the NAR affordability index was still 35% below its pre COVID level as of November. Redfin describes 2025 as another difficult year, with the spring and summer buying seasons barely showing up. High prices, elevated rates, and economic uncertainty kept many buyers on the sidelines.
CNBC’s survey of agents highlights another layer. Many buyers are less focused on rates and more worried about the cost of living. Insurance, utilities, medical costs, and everyday expenses come up again and again in conversations about buying.
There was one bright spot. Redfin notes that wages grew faster than housing costs for the first time since 2016. That helped buyers slowly adjust to the idea that 6% mortgage rates may be the new normal, even if the payments still feel heavy.
Inventory, Listings, and Seller Behavior
Supply improved during parts of 2025, then tightened again toward the end of the year.
Redfin reports that an average of 1.48 million homes were listed or pending each month in 2025, up 18.3% from last year. New listings averaged 565,578 per month, up 6.8% year over year.
But as the year went on and homes took longer to sell, many sellers pulled back. According to FRED, new listings in December 2025 totaled 233,430, down from 237,758 in December 2024.
Price cuts became more common. CNBC found that 92% of agents had at least one seller cut their price, and nearly half said most of their sellers did. Concessions also grew, especially as sellers adjusted to a slower, more negotiable market.
Months of supply averaged 3.5 months in 2025, up from 3 months in 2024, according to Redfin. That is closer to a balanced market, but still tight enough to keep prices supported.
The result feels unusual. Buyers have more leverage. Sellers have less urgency. Prices stay high anyway.
Who is Actually Buying Homes
NAR’s buyer profile shows just how uneven the market has become.
In 2025, first time buyers made up only 21% of the market, the lowest share since tracking began in 1981. The median age of a first time buyer reached 40. At the same time, cash buyers accounted for 26% of all purchases, a record high.
This explains a lot. Entry level buyers remain under serious pressure. Buyers with equity or cash have far more flexibility. That gap shapes which homes sell, how negotiations go, and where prices remain the firmest.
How 2025 Compared to 2024
Looking at the full year and December data side by side, a few themes stand out:
Prices stayed near record levels, with slight softening in median listing prices year over year.
Homes took longer to sell, with days on market rising from 70 to 73 in December.
Sales improved by the end of the year, with December posting a 5.1% increase.
Inventory grew earlier in the year, then tightened again as sellers pulled back.
Buyers gained negotiating power, and sellers adjusted with more price cuts and concessions.
A Market That Feels More Stable, Even If It’s Still Hard
By the close of 2025, the housing market was not fixed. Prices stopped surging. Sales showed signs of life. Buyers slowed down and made more careful choices. Sellers started listening to the market instead of old headlines. The stress did not disappear, but the panic did.
Compared to the end of 2024, this looks like a market learning to breathe again. That kind of stability may not grab attention, but it builds the foundation for healthier years ahead.
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