After two very challenging years, we're finally starting to see some improvement in existing-home sales. Activity in 2023 and 2024 fell to the lowest levels we've seen in nearly 30 years, and 2025 didn't start much differently. Elevated mortgage rates kept many buyers on the sidelines, even if they were eager to make a move.

This fall, however, the market is beginning to improve. As mortgage rates eased, sales started to pick up from the very slow pace seen in the previous year. It's not a dramatic jump, and it is still below what we expected, but it is a meaningful sign that buyers are re-engaging as affordability conditions improve.

Luxury Homes Continue to Lead the Way

One trend that has remained remarkably consistent is the strength of the upper end of the market. When we look at sales by price range, the strongest year-over-year gains continue to be in homes priced above $750,000, especially those priced over $1 million.

This is exactly what we are seeing in the broader economy as well. Higher-income households have continued to spend, and that spending is a big part of what's keeping the overall economy solid. The same dynamic is showing up in real estate. 

And it makes sense: buyers in the luxury segment tend to be less affected by mortgage rate changes, and there is simply more inventory available at these price points. Cash purchases, larger down payments, and lifestyle-driven moves have kept this segment active even during the broader slowdown.

Lower- and mid-priced homes, meanwhile, continue to feel the effect of limited supply and weak affordability. Middle-income households can afford only 21% of the listings currently for sale. Even as inventory improves, middle-income buyers are still out of the market. The market still needs half a million listings priced at up to $260,000 to reach a balanced condition.

What This Means for REALTORS®

The improvement we are seeing this fall is a good reminder that even a small drop in rates can bring buyers back. People who had been in the "wait and see" mode are starting to call again, and more of them are getting pre-approved in case rates fall a bit lower.

For REALTORS®, this is a good time to:

  • Stay in touch with your network. Buyers are watching rates closely and relying on you to help them take the next step.
  • Work with sellers to price their homes realistically. Homes which are well-priced from the start sell nearly five times faster, typically in 10 days versus 46 days for homes that end up needing a price cut.
  • Expect more movement in the upper-end market, where buyers have been the most active.
  • Spend more time with first-time and mid-market buyers who want to move but are still feeling the affordability squeeze.

A Market Trying to Find Its Footing Again

This combination of slightly lower rates, gradual improvement in activity, and continued strength at the top of the market suggests that the housing market is slowly stabilizing. The pace is still far from the highs of the pandemic years, but the direction is finally turning positive.

As we close out 2025, the key story is simple: easing mortgage rates are helping bring buyers back, and we are already seeing the first positive signs in the market.