On The Market The Most Encouraging Sign in 3 Years | Dec. 2025 Housing Market Update
9 snips
Dec 25, 2025 December 2025 brings surprisingly good news for the housing market. Real prices are down, mortgage rates are nearly a percent lower, and affordability is improving significantly. However, increasing underwater mortgages spark concern about potential market distress. Adjustments in seller behavior are stabilizing inventory and challenging what many expect in the market. The data hints at a complex landscape, where possible foreclosures may not indicate a repeat of the 2008 crisis, leaving the housing market looking intriguing for the upcoming year.
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National Flatness, Regional Divergence
- Home prices are roughly flat nationally with a 1.4% year-over-year increase, which Dave Meyer calls a correction rather than a crash.
- Regional differences are large, with many Florida metros down double digits while the Midwest still posts modest gains.
Mortgage Rates Improving Affordability
- Mortgage rates fell roughly one full percentage point from their 2025 peak, improving affordability and buyer reach.
- The spread between Treasury yields and mortgage rates is narrowing, which could further ease mortgage rates if trends continue.
Consider Refinancing If Rates Drop 0.75%
- Consider refinancing if your mortgage has a seven or eight in front and you can cut at least 0.75% in rate.
- Talk to a banker soon because timing changes can make waiting costly, as Dave's listener example shows.