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US Housing Market Shows Signs of Stabilization Amid Cooling Pressures

US Housing Market Shows Signs of Stabilization Amid Cooling Pressures

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 In the past 48 hours, the US housing industry shows signs of stabilization amid cooling pressures. Mortgage rates for 30-year fixed loans dipped to 6.162 percent as of December 22, down 5 basis points from the prior day and 2 basis points from a week ago, per Optimal Blue data reviewed December 19.[2] This follows Federal Reserve cuts in September, October, and early December 2025, offering modest relief after rates topped 7 percent earlier this year.[2]

Home prices rose modestly in Q3 2025 to 706.04 on the All-Transactions House Price Index, up from 703.31 in Q2 and 1.8 percent year-over-year, a sharp slowdown from pandemic surges.[1][3] Half of US homes lost value in 2025 due to higher rates and debt, but experts like Cotality's Selma Hepp call it normalization, not collapse, with 3 percent growth forecast for 2026.[3] Inventory growth halved to 13.54 percent this year, tightening supply amid a 4.7 million unit shortage.[5][4]

Consumer behavior shifted toward affordability, with first-time buyers at just 24 percent of sales, down from 50 percent in 2010; over 75 percent of homes remain unaffordable.[4] Sun Belt markets like Florida cool from insurance hikes, while Midwest areas gain from jobs.[3][6]

No major deals, launches, or disruptions emerged in the last 48 hours. Leaders like builders offer rate buydowns on new homes to counter high rates.[2] Compared to mid-2025's rapid appreciation, today's market rebalances with steadier sales projected at 4.2 million in 2026 versus 4.08 million late 2025.[6] Regional divides persist, but lower rates could spur demand if inventory eases.[3][2]

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