The U.S. housing market experienced a sharp seasonal slowdown over the holiday season, marking its steepest decline in nearly two years. During December, homes stayed on the market for an average of nine days longer than during the same month last year. A number of factors contributed to this trend, according to housing market platform Realtor.com. Inventory dropped 8.6% month-over-month, marking the largest decline since January 2023. Higher mortgage rates also played a part in the slowdown as they reached 6.85% in late December. Despite the $15,000 drop in median listing price, this still deterred some potential buyers.
However, some relief is expected in the new year in the form of marginally lower rates. The Realtor.com 2025 housing forecast projects that mortgage rates will average 6.3% across 2025 and end the year at 6.2%.
Economists at Realtor.com predict that both the slightly lower rates and time will chip away at the “lock-in” effect—homeowners’ unwillingness to list their property due to their current low mortgage rates. Overall, home sales are expected to inch up 1.5% in the new year. Read more