The U.S. housing market remained sluggish in 2025 as high prices and elevated mortgage rates continued to limit home sales.
Sales of existing homes landed at 4.06 million for the year, barely moving from 2024 levels, according to figures released Wednesday by the National Association of Realtors. That total ties the weakest performance since the mid-1990s and extends a downturn that has now stretched back four consecutive years. Annual sales have fallen each year since 2022, when rising interest rates abruptly slowed the pandemic-era buying frenzy.
While transactions stalled, home values did not. The median U.S. home price for 2025 climbed 1.7 percent, reaching $414,400. Limited inventory and homeowners holding onto low-rate mortgages have continued to keep supply tight, preventing prices from easing in a meaningful way. For context, sales have hovered near a 4 million pace since 2023, far below the roughly 5.2 million homes typically sold in a healthy market.
“2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” said Lawrence Yun, chief economist for the Realtors group. “However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth.”
Mortgage rates were a central factor throughout the year. The average 30-year fixed rate hovered around 7 percent early on and remained elevated until late summer. Rates finally eased toward 6 percent by year’s end, according to Freddie Mac, offering some relief.
That shift helped lift sales in December, when existing-home purchases jumped 5.1 percent from November to an annualized rate of 4.35 million, the strongest showing in nearly three years and higher than economists anticipated. Prices also hit a December record, with the median rising to $405,400.
Despite those late gains, affordability remains strained, particularly for first-time buyers without home equity. Combined with ongoing economic uncertainty, many potential buyers are still choosing to wait, keeping the market locked in a slow, uneven recovery.
