The U.S. housing market is experiencing a significant seasonal slowdown as we approach the end of 2025. According to the latest data from Redfin, home listings have seen a meaningful decline, with newly listed homes falling by 1.7% year-over-year as of December 7, 2025. This marks the largest decline in new listings in over two years, reflecting a broader cooling trend in the market. This decrease comes at a time when the housing market typically experiences seasonal shifts, with many buyers and sellers becoming less active as winter sets in. However, the data indicates that the current slowdown is not merely due to seasonal factors, but also driven by persistent challenges in affordability and buyer sentiment.
Alongside the decline in new listings, pending home sales have also taken a significant hit, dropping 4.1% compared to the same period last year. This suggests that potential buyers are holding off on making offers, either due to financial constraints or a lack of urgency to enter the market. The slowdown in buyer activity is further reflected in the amount of time homes are spending on the market. Typically, homes under contract are now staying an average of 51 days on the market before being sold, a slight increase from the previous year. This uptick in time spent on the market is another indication that buyers are proceeding with more caution and are less likely to engage in bidding wars or quick offers.
Experts are pointing to a combination of factors contributing to this market cooling. The seasonal nature of the housing market typically sees a reduction in activity as temperatures drop and the holiday season approaches, with fewer people willing to make big financial commitments during the winter months. However, beyond this typical seasonality, the ongoing challenges around affordability are a much larger factor in the slowdown. High mortgage rates, which remain above 6%, continue to exert pressure on potential buyers. These elevated rates have significantly increased the cost of homeownership, making it more difficult for many buyers to afford the types of homes they are looking for.
Despite the cooling in new listings and a slower pace of home sales, the median sale price has seen modest growth year-over-year. This reflects a more complex and mixed picture of the housing market, where price increases persist in certain areas even as buyer demand wanes. While the market as a whole is cooling off, there are still pockets of resilience where home prices are holding steady or increasing slightly, particularly in regions where supply is constrained and demand remains relatively stable.
The current state of the housing market signals a delicate balance between the typical seasonal slowdown and the broader structural challenges facing the industry. While the high cost of mortgage rates has dampened buyer enthusiasm, the limited supply of homes for sale continues to provide support for home prices in certain markets. As 2025 comes to a close, analysts predict that the affordability challenges and elevated mortgage rates will likely continue into 2026, which may keep many potential buyers on the sidelines. For sellers, this means that while there may be fewer buyers actively looking for homes, there could still be opportunities to secure a good price in the right market. Overall, the U.S. housing market is navigating a period of uncertainty, with mixed signals as it heads into the new year.
