In 2025, U.S. real estate markets had much of the wind taken out of their sails by the political and economic volatility and uncertainty that surged in early spring. However, by mid to late summer, stock markets rebounded to hit new highs, and interest rates began a sustained decline. This shift initiated a change in buyer and seller psychology that is now beginning to show up in market statistics. Generally speaking, more expensive markets in 2025—powered by affluent buyers benefiting from substantial gains in household wealth due to soaring stock markets—performed better than more affordable markets, which were more heavily impacted by concerns around inflation, affordability, and employment.

As 2026 begins, interest rates are near multi-year lows and stock markets are at or close to all-time peaks. Early in the new year, it is common for buyers ready to move forward with major life decisions to re-enter the market faster than sellers list their homes for sale. This imbalance between increasing demand and an inadequate supply of new listings typically carries through the spring, making these months the most heated of the year. Last year, this pattern was disrupted by the tariff shock. Barring new, unexpected economic alarms, expectations are for a much stronger spring market this year.

This report focuses primarily on annual trends in home prices and other standard market indicators, while also reviewing macroeconomic factors that substantially affect real estate market conditions.

According to NAR Chief Economist Lawrence Yun, “2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales. However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth. December home sales, after adjusting for seasonal factors, were the strongest in nearly three years. These gains were broad-based, with all four major regions improving from the prior month.” 

Read the full report HERE