Real Estate Rundown December 2025

Photo by Lawrence Krowdeed via Unsplash

A Look Ahead to 2026

The housing market may finally be gearing up for a meaningful rebound in 2026, with NAR Chief Economist Lawrence Yun forecasting a 14% jump in existing-home sales and a 5% rise in new-home sales after a stagnant 2025. Strengthening job growth, rising mortgage applications, and steady builder activity are helping build early momentum, while mortgage rates—now averaging 6.24%—are expected to drift modestly lower toward 6% by 2026, improving affordability for more buyers. Home prices are projected to continue rising, up an estimated 4% next year, supported by tight supply and strong equity positions among current homeowners. However, the recovery won’t be felt equally: first-time buyers remain squeezed by high costs and heavy debt burdens, while equity-rich repeat buyers and upper-end markets continue to outperform. With price reductions returning and days on market rising, sellers are adjusting expectations, but strong fundamentals—low delinquencies, solid job growth, and significant homeowner equity—suggest the market is setting the stage for a more active, balanced 2026.

Home Prices Begin to Cool Down

National home-price growth continued to cool in September, with the S&P CoreLogic Case-Shiller Index showing just a 1.3% annual gain—its weakest increase since mid-2023. More than half of the 20 major metros tracked saw year-over-year price declines, particularly in southern and western markets like Tampa and Phoenix, while Chicago and New York posted the strongest gains. Every metro experienced month-to-month price drops, underscoring broad market softness as elevated mortgage rates and historically low affordability weigh on demand. Despite a slight dip in mortgage rates, high prices relative to income continue to strain buyers, keeping sales at subdued levels even as real, inflation-adjusted home values decline modestly. Experts say the market is settling into a slower, more uneven pattern of price movement heading into year-end, with affordability challenges and patchy inventory recovery shaping local outcomes.

Delistings Jump Rather Than Go Stale

Homeowners are increasingly pulling their listings off the market, with September seeing nearly 85,000 delistings—up 28% from last year and the highest level in eight years. Redfin reports that 5.5% of all listings were delisted, the highest September share in a decade, as slow demand, high mortgage rates, and widespread economic uncertainty cause listings to sit on the market longer. With 70% of homes considered “stale,” many sellers—especially those who purchased within the last five years—are choosing to delist rather than accept lower offers or risk selling at a loss. This wave of delistings is keeping inventory tighter than it appears and helping prop up home prices, which remain higher despite sluggish buyer activity. While some sellers plan to relist later or rent their homes instead, the trend highlights a market struggling with affordability, shifting seller expectations, and uneven inventory recovery heading into year-end.

Improved Affordability Fuels Market

Home shoppers this fall are seeing some of the steepest price cuts in years, as the typical October listing received $25,000 in cumulative discounts—matching the largest markdowns Zillow has ever recorded. While individual price cuts remain close to $10,000, sellers are increasingly trimming prices multiple times as listings sit on the market longer and affordability improves to its best level in three years. This shift is helping fuel the most active fall since 2022, with many homeowners willing to adjust pricing thanks to the significant equity gains of recent years. Deepest discounts appear in high-cost metros like San Jose, Los Angeles, and New York, while relative bargains are strongest in Pittsburgh, New Orleans, and Austin. Meanwhile, affordable markets like St. Louis, Louisville, and Indianapolis see only modest reductions as steady demand keeps homes moving. Overall, the data signals a market recalibrating toward buyers—offering new opportunities for those who have been waiting for prices to budge. 

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