US Home Sales Hit 30-Year Low Again/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ US home sales stayed at a 30-year low in 2025. High mortgage rates and rising home prices discouraged buyers. The housing slump marks its fourth consecutive year of decline.
2025 US Home Sales Quick Look
- Annual Sales: 4.06 million existing homes sold — flat vs. 2024
- Lowest Since: 1995, marking four straight years of decline
- Median Price: Rose 1.7% to $414,400
- Mortgage Rates: Averaged 7%, dropped to ~6% by year-end
- Buyer Struggles: Affordability crisis worsened, especially for first-timers
- Inventory: Low supply kept prices high despite weak demand
- December Rebound: Sales rose 5.1% month-over-month
- Outlook: 2026 may remain sluggish without affordability reforms
Home Sales in U.S. Remain at 30-Year Low in 2025 as High Prices and Mortgage Rates Limit Buyer Activity
Deep Look
WASHINGTON — U.S. home sales remained frozen at historic lows in 2025, extending a slump that began in 2022 and leaving the housing market stuck at a 30-year low, according to data released Wednesday by the National Association of Realtors (NAR).
The total number of existing home sales—residential properties that were previously owned—stood at 4.06 million in 2025. That figure matches the total for 2024 and reflects the lowest level of annual home sales since 1995, when the U.S. was emerging from a previous housing downturn.
Affordability Crisis Persists Despite Slight Rate Relief
While mortgage rates eased slightly toward the end of 2025, the damage to affordability had already been done. At the beginning of the year, 30-year fixed mortgage rates were hovering near 7%, a significant increase from the pandemic-era lows of 2% to 3%. Even after sliding closer to 6% by December, mortgage costs remained out of reach for millions of potential buyers.
“The combination of elevated borrowing costs, soaring home prices, and stagnant wage growth has made homeownership financially unfeasible for many Americans,” said a housing economist familiar with the data. “Even with rates declining, prices haven’t adjusted enough to offset the affordability gap.”
Median Prices Rise Amid Low Inventory
In addition to steep borrowing costs, buyers continue to face record-high home prices. The median home price for 2025 rose 1.7% to $414,400, a new annual high, despite lower transaction volume. This price growth, though modest compared to earlier pandemic booms, keeps pressure on first-time buyers and those without substantial equity.
“The problem isn’t just mortgage rates—it’s that prices haven’t fallen,” said an independent real estate analyst. “We’re stuck in a market where demand is weak, but supply is even weaker, which is keeping prices high.”
Housing inventory remains limited, especially for affordable homes. Many homeowners locked into ultra-low mortgage rates during 2020 and 2021 are reluctant to sell, creating a so-called “golden handcuff” effect in the market.
Annual Sales Still Well Below Pre-Pandemic Norms
From a historical perspective, U.S. home sales typically average about 5.2 million per year. The sustained drop below the 4.1 million mark for the past two years highlights just how deeply the market has been affected by the post-pandemic economic environment, which includes inflationary pressures, interest rate hikes by the Federal Reserve, and persistent supply-chain challenges in home construction.
This is now the fourth consecutive year of declining home sales, starting in 2022 when the Federal Reserve began raising interest rates in a bid to tame inflation. That monetary tightening had a direct effect on mortgage rates, effectively pricing out millions of would-be buyers.
December Offers a Glimmer of Hope
Despite the bleak annual totals, the housing market showed a slight rebound in December 2025, as existing home sales rose 5.1% from November—the fastest month-over-month growth in nearly three years. The improvement came as borrowing costs fell, stoking some pent-up demand from buyers who had been waiting on the sidelines.
However, analysts caution against reading too much into one month of data, especially given ongoing economic uncertainty.
First-Time Buyers Still Face Steep Barriers
For first-time homebuyers, the dream of ownership remains out of reach for many. Without the benefit of selling a previous home or tapping into equity, they must come up with larger down payments amid higher monthly costs. Rising prices have also eroded the effectiveness of federal and state assistance programs that were designed to help lower-income or younger buyers.
Moreover, economic anxiety and concerns about job security have contributed to buyer hesitation. Inflation may be cooling, but prices for essentials like food and energy remain high in many parts of the country, limiting the financial flexibility of average households.
Outlook for 2026: Mixed Signals
While the downward trend in mortgage rates may continue into 2026 if the Federal Reserve cuts interest rates, market watchers say it will take more than slightly cheaper loans to revive the housing market. What’s needed is an increase in affordable housing supply, better wage growth, and more targeted assistance for first-time buyers.
“It’s not enough for rates to fall to 5.5% or even 5%,” said one industry analyst. “We need to address the root causes of unaffordability—limited inventory, zoning constraints, and income inequality.”
Until then, 2026 may look a lot like 2025: slow-moving, frustrating, and expensive for millions of Americans chasing the dream of homeownership.
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