| Consensus | Consensus Range | Actual | Previous | Revised | |
| Annual Rate | 4.230M | 4.060M to 4.300M | 4.35M | 4.13M | 4.14M |
Highlights
Further moderation in mortgage rates in November and into December helped spur sales of existing homes at year-end. The monthly average for a Freddie Mac fixed rate mortgage is down to 6.19 percent in December after 6.24 percent in November. While this is good news for home sellers, it means that competition for existing units will heat up and push home prices higher as inventory tightens. Current homeowners with smaller loans with very low interest rates from just a few years ago will be reluctant to lose their affordable situation with up- or down-grading to a more expensive property. However, some homeowners who have seen significant gains in home equity and/or changing life circumstances may be more willing to list their homes.
Sales of existing homes gain 5.1 percent in December to a seasonally adjusted annual rate of 4.35 million units and are up 1.4 percent compared to a year ago. The pace of sales in December is above the consensus of 4.23 million units in the Econoday survey of forecasters. Sales of existing homes are for contracts closes using mortgages usually qualified for in the prior month or two.
Resales of single-family homes are up 5.1 percent in December to 3.95 million units and up 1.8 percent year-over-year. Resales of co-ops and condos are up 5.3 percent to 400,000 in December but down 2.4 percent from 410,000 a year ago. The bump in sales at the end of the year suggests that homebuyers found a good balance between the cost of purchase and loan rates for the right unit.
The month's supply of homes available for sale drops to 3.3 in December from 4.2 in November and is the lowest since 3.2 in December 2024. The median price of an existing home is down 1.1 percent to $405,400 in December from $410,000 in November and up 0.4 percent from a year ago to $403,700. The NAR notes that this is the 30th consecutive month of year-over-year price increases. Home prices typically rise in the first half of the year and decline in the second half. With the contraction in supply at a time when the rate for a 30-year fixed rate mortgage is moving close to the 6-percent mark, prices are likely to rise quickly in the first months of 2026 and buyers may be facing more concessions to close deals.
The average number of days on the market rose to 39 in December after 36 in November and is longer than 35 days in December 2024.
Market Consensus Before Announcement
Forecasters see slightly better sales at an annual 4.23 million in December versus 4.13 million in November with lower mortgage rates.
Definition
Existing home sales tally the number of previously constructed homes, condominiums and co-ops in which a sale closed during the month. Existing homes (also known as home resales) account for a larger share of the market than new homes and indicate housing market trends.
Description
This provides a gauge of not only the demand for housing, but the economic momentum. People have to be feeling pretty comfortable and confident in their own financial position to buy a house. Furthermore, this narrow piece of data has a powerful multiplier effect through the economy, and therefore across the markets and your investments. By tracking economic data such as home resales, investors can gain specific investment ideas as well as broad guidance for managing a portfolio.
Even though home resales don't always create new output, once the home is sold, it generates revenues for the realtor. It brings a myriad of consumption opportunities for the buyer.
Refrigerators, washers, dryers and furniture are just a few items home buyers might purchase. The economic"ripple effect" can be substantial especially when you think a hundred thousand new households around the country are doing this every month. Since the economic backdrop is the most pervasive influence on financial markets, home resales have a direct bearing on stocks, bonds and commodities. In a more specific sense, trends in the existing home sales data carry valuable clues for the stocks of home builders, mortgage lenders and home furnishings companies.
