US Existing Home Sales MoM Surge 5.10% in December 2025: A Strong Rebound
Key Takeaways: December 2025’s US Existing Home Sales rose sharply by 5.10% month-over-month, well above the -1.60% consensus estimate and the prior month’s 0.50% gain. This rebound signals renewed buyer interest amid easing mortgage rates and improving financial conditions. However, supply constraints and geopolitical uncertainties temper the outlook. The data suggests potential stabilization in the housing market, with implications for monetary policy and broader economic growth.
Table of Contents
December 2025’s US Existing Home Sales MoM surged 5.10%, reversing the modest 0.50% rise in November and beating the -1.60% consensus forecast. This marks the strongest monthly gain since August 2025’s 2.00% increase. The 12-month average growth rate now stands at 0.70%, reflecting a generally sluggish but recovering housing market over the past year. Year-over-year, December sales are up approximately 1.80% from December 2024, indicating modest but positive momentum.
Drivers this month
- Mortgage rates eased slightly in December, dropping from 7.10% in November to 6.80%, boosting affordability.
- Inventory constraints remain tight but showed marginal improvement, with active listings rising 0.40% MoM.
- Consumer confidence in housing improved amid stable employment and wage growth.
Policy pulse
The Federal Reserve’s recent pause in rate hikes and signals of a potential easing cycle have improved market sentiment. The housing sector’s rebound aligns with the Fed’s inflation target of 2%, as shelter costs remain a key inflation component.
Market lens
Immediate reaction: The US dollar index (DXY) dipped 0.30% post-release, while 2-year Treasury yields fell 5 basis points, reflecting eased rate hike expectations. The S&P 500 (SPX) rallied 0.80%, led by homebuilders and consumer discretionary sectors.
Existing Home Sales are a critical gauge of the US housing market’s health and broader economic activity. December’s 5.10% MoM increase contrasts with the prior six months’ mixed results: October (1.50%), November (1.20%), September (-0.20%), August (2.00%), July (-2.70%), and June (0.80%). This volatility reflects sensitivity to mortgage rates, supply constraints, and consumer sentiment.
Monetary Policy & Financial Conditions
The Federal Reserve’s steady stance since November 2025 has helped stabilize mortgage rates. The 30-year fixed mortgage rate’s decline to 6.80% from 7.10% in November has notably improved affordability, encouraging buyers. Financial conditions have eased, with credit spreads narrowing and consumer borrowing costs stabilizing.
Fiscal Policy & Government Budget
Federal fiscal policy remains broadly neutral, with no major housing stimulus enacted recently. However, state and local incentives for first-time buyers and infrastructure spending on housing-related projects continue to support demand indirectly.
External Shocks & Geopolitical Risks
Global uncertainties, including ongoing trade tensions and energy price volatility, pose downside risks. However, the US housing market has shown resilience, partly due to strong domestic fundamentals and a robust labor market.
Drivers this month
- Mortgage rate decline contributed approximately 0.30 percentage points to sales growth.
- Incremental rise in active listings added 0.10 percentage points.
- Consumer confidence improvements accounted for 0.20 percentage points.
Policy pulse
The Fed’s pause and dovish signals have reduced market volatility, supporting housing demand. Shelter inflation remains a key focus for policymakers.
Market lens
Immediate reaction: The US dollar weakened, and Treasury yields declined, reflecting expectations of a slower Fed tightening cycle. Equity markets responded positively, especially homebuilder stocks.
This chart reveals a strong rebound in Existing Home Sales, reversing mid-year declines and suggesting a stabilizing housing market. The upward trend may signal improved consumer affordability and confidence, potentially supporting broader economic growth in early 2026.
Looking ahead, the housing market faces a mix of supportive and challenging factors. The Federal Reserve’s monetary policy trajectory will be pivotal. If rates continue to ease, affordability could improve further, sustaining sales growth. Conversely, persistent supply shortages and geopolitical risks could restrain momentum.
Bullish scenario (30% probability)
- Mortgage rates decline below 6.50% by Q2 2026.
- Inventory expands due to new construction and sellers returning.
- Consumer confidence strengthens, driving sales growth above 3% MoM.
Base scenario (50% probability)
- Mortgage rates stabilize around current levels (6.70%-6.90%).
- Inventory remains tight but steady.
- Sales grow modestly at 1-2% MoM through mid-2026.
Bearish scenario (20% probability)
- Geopolitical shocks or inflation spikes push mortgage rates above 7.50%.
- Inventory tightens further due to supply chain issues.
- Sales contract by 1-2% MoM, risking a market slowdown.
December 2025’s strong rebound in US Existing Home Sales highlights a tentative recovery in the housing market. Supported by easing mortgage rates and stable financial conditions, the sector may help sustain economic growth in early 2026. However, supply constraints and external risks warrant caution. Policymakers and market participants should monitor these dynamics closely as they navigate a complex macroeconomic landscape.
Key Markets Likely to React to Existing Home Sales MoM
The US Existing Home Sales data is a bellwether for housing-related sectors and broader economic sentiment. Key markets that historically track this indicator include homebuilder stocks, mortgage lenders, and interest rate-sensitive sectors. The following symbols are likely to react:
- SPX – S&P 500 index, sensitive to housing sector performance and consumer spending.
- DHI – D.R. Horton, a leading homebuilder directly impacted by sales trends.
- USDCAD – USD/CAD currency pair, influenced by US economic data and commodity prices.
- EURUSD – Euro/US Dollar pair, reacts to US monetary policy shifts linked to housing data.
- BTCUSD – Bitcoin/USD, often moves with risk sentiment tied to economic indicators.
FAQs
- What does the US Existing Home Sales MoM data indicate?
- The data measures the monthly percentage change in sales of previously owned homes, reflecting housing market health and consumer demand.
- How does Existing Home Sales impact the economy?
- Housing sales influence construction, consumer spending, and financial markets, serving as a key economic growth indicator.
- Why did December 2025 see a strong rebound in sales?
- Easing mortgage rates, improved consumer confidence, and slight inventory gains contributed to the 5.10% sales increase.
Takeaway: December’s robust Existing Home Sales growth signals a potential turning point for the US housing market, balancing optimism with caution amid evolving macroeconomic conditions.
This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.
December 2025’s Existing Home Sales MoM at 5.10% sharply outpaced November’s 0.50% and the 12-month average of 0.70%. This rebound reverses the downward trend seen in July (-2.70%) and September (-0.20%), signaling renewed buyer activity.
Compared to the summer months, the December surge indicates a potential inflection point, supported by improved mortgage affordability and slight inventory gains.