For the US overall, worst sales for any December on record. The housing market took a bad turn, from already low levels.
By Wolf Richter for WOLF STREET.
Pending home sales, which track the number of contracts signed in December, plunged by 9.3% seasonally adjusted from November, to the lowest level for any December on record in the data by the National Association of Realtors, which goes back to 2010. Compared to December 2010, during the Housing Bust, pending sales were down by 21.5%.
The market is now well into its fourth year of the collapse in transactions, and there has simply been no improvement.
Pending home sales compared to the Decembers in prior years (historic data via YCharts):
- 2024: -3.0% (year-over-year)
- 2023: -8.1%
- 2022: -5.9%
- 2021: -38.2%
- 2020: -43.2%
- 2019: -30.6%.
The metric of pending sales tracks contracts that were signed in December but that haven’t closed yet and could still get canceled because buyers cannot afford homeowner’s insurance, or cannot sell their own home, or for other reasons. The rate of cancellations has been running high in 2025.
The December downturn in pending sales occurred in all four regions, from already low levels, but was particularly pronounced in the Midwest, where sales collapsed by 14.9% seasonally adjusted to a new record low.
Pending home sales by region.
A map of the four Census Regions is posted in the comments below.
In the Midwest, pending sales plunged by 14.9% seasonally adjusted in December from November and by 9.8% year-over-year, to a new record low level of sales in the data going back to 2010.
Compared to the Decembers of prior years:
- 2024: -9.8% (year-over-year)
- 2023: -16.0%
- 2022: -13.2%
- 2021: -39.6%
- 2020: -41.3%
- 2019: -31.7%.
In the West, pending sales plunged by 13.3% in December from November, seasonally adjusted, to the worst level of sales for any December on record, and to the fourth-lowest level of sales for any month.
Compared to the Decembers of prior years:
- 2024: -5.1% (year-over-year)
- 2023: -9.0%
- 2022: -8.0%
- 2021: -41.0%
- 2020: -51.2%
- 2019: -40.9%.
In the Northeast, pending sales plunged by 11.0% month-to-month, to the second-worst level of sales on record.
Compared to the Decembers of prior years:
- 2024: -3.6% (year-over-year)
- 2023: -3.5%
- 2022: -6.0%
- 2021: -36.5%
- 2020: -44.5%
- 2019: -33.9%.
In the South, pending sales fell by 4.0% in December. Compared to the Decembers of prior years:
- 2024: +2.0% (year-over-year)
- 2023: -4.7%
- 2022: -0.7%
- 2021: -36.6%
- 2020: -39.8%
- 2019: -23.5%.
At fault are the ultra-low mortgage rates of 2020-2022 that ended up destroying the housing market in two ways: By causing prices to explode in a two-year time span, and by “locking in” homeowners with ultra-low mortgage rates who now cannot afford to move, which has destroyed the dynamics that come with a functioning housing market, such as mobility, where people are able to move.
The unwinding of the below-4% mortgage rates is occurring, and so the lock-in effect is gradually loosening as these mortgages get paid off nevertheless, but at a snail’s pace [“Locked-in” Homeowners Nevertheless Pay Off Below-4% Mortgages: their Share Drops to Lowest since Q4 2020
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The four Census Regions of the US:
Tough times ahead. It’s taken 4 years for a 4% mortgage to drop from 40% to 30% of all loans. I can’t imagine it being folks paying off their mortgage, rather locked into a smaller home, or cost burdened.
Good article. Curious to see how this trend will affect those with ARMS.
“Curious to see how this trend will affect those with ARMS.”
I have seen more in the northeast homes for sale for this time of year,some move/many sit,have seen in N.H. some better pricing to a degree,perhaps my time is coming.
I will say as a stacker of pm’s am not sure whether to celebrate and party or cry and bunker down,luckily,both options available.