Pending Home Sales Drop 9.3% in December as Limited Listings Cool Buyer Activity

Pending home sales fell 9.3% in December 2025 from the month prior, according to the National Association of Realtors®. Month-over-month pending home sales also declined in all four regions.

The new numbers reveal that limited listings have cooled buyer activity.

“The housing sector is not out of the woods yet,” said NAR Chief Economist Lawrence Yun. “After several months of encouraging signs in pending contracts and closed sales, the December new contract figures have dampened the short-term outlook.”

But year over year, it was mixed depending on the region. Pending home sales rose in the South compared to the year prior, but declined in the Northeast, Midwest, and West.

"Even after accounting for typical seasonal patterns, interpreting in-person home search activity in the winter—especially in December—can be tricky due to public holidays, people taking time off, and wintry weather conditions," Yun added.

"We’ll be watching the data in the coming months to determine whether the soft contract signings were a one-month aberration or the start of an underlying trend."

In December 2025, national pending home sales decreased 9.3% month over month, but year over year there was a 3% decrease.

"Pending home sales, also known as contract signings, represent the first formal step in the homebuying process, when buyers and sellers agree on price and terms," explains Hannah Jones, senior economic research analyst at Realtor.com®. "Because pending sales typically lead existing home sales by one to two months, they serve as a useful indicator of near-term market activity."

By region, the South decreased 4% month over month, but was the only region to see an increase (2%) year over year. The Northeast decreased 11% month over month and 3.6% year over year. The West decreased 13.3% month over month and a 5.1% decrease year over year. The Midwest saw the biggest decrease (14.9%) month over month and year over year (9.8%).

"Data shows closing activity increased in December. However, new listings did not keep pace so inventory decreased," Yun explained.

"Consumers prefer seeing abundant inventory before making the major decision of purchasing a home. So, the decline in pending home sales could be a result of dampened consumer enthusiasm about buying a home when there are so few options listed for sale. In December there were only 1.18 million homes on the market – matching the lowest inventory level of 2025."

Local market gains

Breaking it down to a metro level, there are several local markets showing signs of notable gains year over year. Among the 50 largest metros, Realtor.com® economists found 10 markets posted the biggest annual increases in pending home sales.

1. Louisville/Jefferson County, KY-IN (+23.8%)
2. San Antonio–New Braunfels, TX (+13.6%)
3. Virginia Beach–Chesapeake–Norfolk, VA-NC (+11.0%)
4. Charlotte–Concord–Gastonia, NC-SC (+9.7%)
5. Boston–Cambridge–Newton, MA-NH (+9.2%)
6. Phoenix–Mesa–Chandler, AZ (+8.7%)
7. Oklahoma City, OK (+8.0%)
8. Miami–Fort Lauderdale–West Palm Beach, FL (+6.3%)
9. Pittsburgh, PA (+5.8%)
10. Memphis, TN-MS-AR (+4.7%)

"After several months of solid pending home sales performance, December’s relative softness highlights the crosscurrents shaping today’s housing market," says Jones.

"Although mortgage rates have eased from recent highs, roughly 80% of mortgage holders still have a rate below 6%, making the prospect of trading in a low-rate mortgage for a higher one both costly and unappealing. At the same time, home prices remained near record highs, and ongoing economic and labor market uncertainty has encouraged some would-be buyers to pause or wait for clearer signals in the new year."

Consumer confidence

The NAR Realtors Confidence Index surveyed real estate agents about what they're seeing in their local markets based on client interactions and trends for their most recent sales month. The survey found the median time on the market for properties was 39 days—which is up from 36 days in November and 35 days in December 2024.

First-time homebuyers accounted for 29% of sales in December—that's down from 30% last month and 31% in December 2024.

Cash sales in December accounted for 28% of transactions, that's up from 27% the month prior.

Individual investors or second-home buyers made up 18% of December's transactions, which remained unchanged from November 2025.

Distressed sales—which accounted for foreclosures and short sales—made up 2% of sales.

But NAR members remain optimistic, with 31% of members saying they expect an increase in buyer traffic over the next three months—that percentage is up from 22% the month before. Meanwhile, 28% expect an increase in seller traffic—that sentiment is up from 18% in November 2024.

"December’s pending data suggests a slow start to the year in terms of home sales. While easing mortgage rates and gradually improving supply have provided some support, the housing market remains in a low gear, with both buyer and seller activity still subdued," says Jones.