US Housing Market Shifts as 2025 Concludes - Declining Prices, Rising Sales, and Changing Dynamics
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US Housing Market Shifts as 2025 Concludes - Declining Prices, Rising Sales, and Changing Dynamics
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The US housing market is entering its final weeks of 2025 with a notable transformation underway. As of late November, home prices are trending below 2024 levels for the first time this year, with asking prices now approximately 2 percent below 2024 levels. This marks a significant shift from earlier in the year when the median home price reached a record 432,700 dollars in July 2025.
Despite softer prices, home sales activity is accelerating. Weekly pending home sales have reached their strongest November pace since 2021, averaging 59,000 single-family homes per week compared to 54,000 a year ago. This represents an 8 percent increase year-over-year and reflects the fastest sales pace in the past three years. Inventory levels are also expanding, currently running 15.7 percent higher than last year and approaching pre-pandemic 2019 norms, which is reshaping buyer behavior and creating more negotiating power for purchasers.
The mortgage rate environment is providing additional support to the market. The 30-year fixed rate mortgage declined to 6.23 percent on November 26 from 6.26 percent on November 20, marking rates at their lowest levels of 2025. Experts predict mortgage rates will remain in the mid-to-low 6 percent range throughout December, with most forecasts centering around 6.25 to 6.375 percent.
Geographic variations are becoming apparent. Markets that experienced pandemic-era overheating are seeing the sharpest price declines. Tampa leads with a 5 percent price decrease from 2024, while Chicago and New York maintain tight inventory conditions with prices still climbing approximately 5 percent year-over-year.
Affordability metrics show modest improvement. Housing affordability improved year-over-year for the seventh consecutive month in September 2025, marking the longest improvement streak since 2019-2020. The median age of first-time home buyers reached 40 years old in 2025, reflecting demographic shifts in the buyer pool.
Looking ahead to 2026, current market conditions suggest the potential for stronger sales growth. The combination of stabilizing prices, increased inventory, lower mortgage rates, and improving affordability is creating an environment that could support increased transaction volume in the coming year.
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This content was created in partnership and with the help of Artificial Intelligence AI
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