High Mortgage Rates and Economic Uncertainty Continue to Sideline Buyers as Listings Also Decline
Pending home sales across the United States posted their steepest annual decline of 2025 in mid-December, signaling continued hesitation among buyers as mortgage rates remain elevated and economic uncertainty lingers.
Sales of homes under contract fell 5.8% from a year earlier during the four weeks ending Dec. 14, according to a report released by Redfin, a real estate brokerage operated by Rocket. The drop marked the largest year-over-year decrease recorded so far this year.
At the metropolitan level, pending sales declined in 44 of the 50 largest U.S. metro areas. The sharpest decreases were reported in San Jose, California, where pending sales fell 35.1%, followed by Houston at 20.9% and Oakland, California, at 17.6%.
Homes that did go under contract took longer to sell. The typical U.S. home spent 52 days on the market before a buyer signed a contract, roughly one week longer than during the same period last year.
Redfin attributed the slowdown in buyer activity to mortgage rates that have remained above 6%, combined with rising home prices that continue to stretch affordability. Some prospective buyers are also waiting for clearer economic signals before making major purchases, citing concerns about job security amid signs of softening in the labor market. In contrast, pending sales rose during the same period last year as uncertainty surrounding the 2024 presidential election eased.
Weaker demand is also affecting sellers. New home listings declined 3.1% from a year earlier, the largest drop in more than two years. Overall housing inventory rose just 4.2%, the smallest increase since early 2024, suggesting many homeowners are choosing to delay listing their properties while the market shows signs of favoring buyers.
Redfin said some sellers appear to be waiting until the new year in hopes that demand improves and borrowing costs ease.
