The U.S. housing market slump dragged into its fourth year in 2025 as sales remained stuck at a 30-year low with rising home prices and elevated mortgage rates keeping many prospective home shoppers out of the market.
Sales of previously occupied U.S. homes totaled 4.06 million last year, flat versus 2024, when sales sank to the lowest level since 1995, the National Association of Realtors said Wednesday. Sales have declined on annual basis every year since 2022.
The median national home price for all of last year rose 1.7% to $414,400, the NAR said.
Sales have been stuck at around a 4-million annual pace now going back to 2023. That’s well short of the 5.2-million annual pace that’s historically been the norm.
The U.S. housing market has been in a sales slump dating back to 2022, when mortgage rates began to climb from pandemic-era lows. The average rate on a 30-year mortgage was around 7% a year ago and remained elevated for much of the year until late summer, when they began to ease, falling to close to 6% by the end of the year, according to Freddie Mac.
That recent pullback in mortgage rates helped drive existing U.S. home sales 5.1% higher in December from the previous month, the fastest sales pace in nearly three years.
Even so, affordability remains a challenge for many aspiring homeowners, especially first-time buyers who don’t have equity from an existing home to put toward a new home purchase. Uncertainty over the economy and job market are also keeping many would-be buyers on the sidelines.
