As temperatures plummeted over the festive season, so did the level of activity in the residential real estate market, which experienced its strongest seasonal slowdown in nearly two years.
“Homes spent 70 days on the market, the slowest December in five years and the slowest month since January 2023,” says Realtor.com® senior economist Ralph McLaughlin in his December monthly housing report.
The average home lingered on the market for nine days longer than in December 2023. In November, homes spent an average of 62 days on the market. Inventory also plunged 8.6% from November—the largest decrease since January 2023.
The glacial pace of home sales came down to higher mortgage rates, which rose to 6.85% for the week ending Dec. 26, according to Freddie Mac. This has kept potential buyers firmly on the sidelines as they bided their time through the fall and early winter months. That’s despite the median listing price edging down about $15,000 since last year, to $402,502.
“We find that high mortgage rates continue to bring a slow market, with December 2024 being the slowest December since 2019 and the slowest month in nearly two years,” says McLaughlin.
Homes spent 70 days on the market in December, which is nine more days than last year.
Like homebuyers, sellers also took a breather last month, with just 0.9% more homes newly listed on the market compared with last year, and down 2% from November.
On the plus side, the number of homes under contract but not yet sold continued to rebound in December, increasing by 7.4% compared with last year, but it was still nearly half of November’s 14.7% gain.
“It is typical for the housing market to slow down at the end of the year as buyers and sellers focus their attention on end-of-year festivities and push activity to the new year, once the market and the weather are warmer,” says Hannah Jones, senior economic research analyst at Realtor.com.
But Jones stresses that the market slowed more than is typical between November and December, in part because of the elevated mortgage rates hovering in the high 6% range since late October.
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.
Home prices continue sliding
The median home price last month decreased by 1.8% year over year, arriving at $402,502. However, this bottom-line number does not tell the whole story.
“When a change in the mix of inventory toward smaller homes is accounted for, the typical home listed this year has increased in asking price compared with last year,” notes McLaughlin in the monthly report. “The median listing price per square foot increased by 1.3% in December compared with the same time last year.”
Essentially, while the median listing price for a home might have dropped, it’s only because cheaper properties boasting a more modest square footage are hitting the market. It’s a continuation of a trend previously seen in November.
While listing price cuts remained steady year over year at around 13%, data shows that home sellers were more likely to play hardball with the price compared with November, when 16.7% of listing prices were slashed.
Housing inventory keeping steady
The number of active listings on the market ticked up in December, with 22% more homes for sale compared with the same time a year ago, making it the 14th straight month where inventory grew.
But McLaughlin points out that this is a dramatic deceleration from November, when active listings jumped by 26.2% year over year. The whopping 8.6% decrease from November to December was the largest month-over-month drop since January 2023.
“While inventory this December certainly continues to improve, it is still down 15.7% compared with typical 2017 to 2019 levels,” McLaughlin adds.
When it comes to nationwide housing stock, the South continued to dominate the market, with a 26.7% surge in active listings compared with December 2023, although the median listing price saw a 2.3% decrease year over year.
The West saw a 23.7% increase in home inventory last month, accompanied by a 1.3% drop in median listing price compared with the same time last year.
Compared with the typical December from 2017 to 2019 before the COVID-19 Pandemic, the South fully closed the gap in inventory.
The Midwest and Northeast continued playing catchup with their housing stock levels, with active listing counts sitting at 15.2% and 6.9%, respectively, and listing prices remaining virtually flat year over year.
Meanwhile, new listings were all over the map in December, with the South seeing the biggest gain, at 4.8%, followed by the West, at 2%. Both the Northeast and the Midwest, however, suffered losses, shedding 5.6% and 6.6% in new listings, respectively.
Compared with the typical December from 2017 to 2019, before the COVID-19 pandemic, the South fully closed the gap in housing stock, while the gap was 4% in the West, and much larger in the Midwest and Northeast, at 36.5% and 48.7%, respectively.
Would-be homebuyers looking for the biggest selection of properties for sale in major metros should turn their attention to Miami, where inventory spiked in December by an eye-popping 45.4%, followed by Orlando, FL, with 42.4%, and Denver, with just under 42%.
Meanwhile, Atlanta was ahead when it came to the most new listings (+17.8%), with Birmingham, AL, hot on its heels (+17.1%).
In December, there were roughly 871,600 active, unsold (not under contract), listings on the market.
In all, there were about 871,600 active, unsold listings on the market in December, along with some 350,000 under-contract listings.
December’s sluggish market could be both a blessing and a curse for buyers thinking of snapping up a home during the slow winter months. On the one hand, a dearth of fresh listings means fewer options for buyers, but it also means that they have more time to make a decision and less competition.
“It is challenging to perfectly time the housing market,” Jones says. “Winter may be a great time to buy for some buyers who are looking for more seller flexibility and can find a suitable home on the market.
“However, spring may be better for buyers who cannot find what they are looking for on the market now, and are willing to pay a bit more for their ‘perfect’ home.”
