New-Home Sales Fall Less Than Expected in December—With Demand Picking Up in the Midwest

New single-family home sales picked up in December compared to the year earlier, moved by recovery in the Midwest.

About 745,000 homes sold nationwide in December compared to 718,000 the year prior, according to seasonally adjusted data released by the U.S. Census Bureau Friday. And the median sale price nationwide dropped 2% year over year to $414,000.

The Midwest drove the quickening pace, tracking a 30% sales increase to 108,000 homes. The Northeast also saw a 12% increase in sales to 37,000. The West saw a modest 1.8% gain, and the South a 1.1% decline.

Census is tracking a slight inventory decline in that time. About 472,000 homes were on the market at the end of December 2025—3.5% below the 489,000 the year prior. Supply is 7.6 months compared to 8.2 months in December 2024.

Compared to November's seasonally-adjusted data, home sales dropped about 1.7% from 485,000, and the median sales price rose 4.2% from $397,000.

Realtor.com® Senior Economist Joel Berner says falling interest rates might be enticing some early buyers back into the market. December is historically a slower month for home sales.

"Low mortgage rates are driving the December pickup more than seasonality, which would usually make December a slow month," Berner says. "In fact, though, the non-seasonally adjusted December was on pace with the summer months of 2025, so there may be something to the idea that seasonality has broken down, at least this year when rates fell at the end of the year."

This data includes homes sold at all stages. But the number of sales on homes that haven't started construction declined by 30%. Sales of those under construction or already completed grew.

What this means for home sales in 2026

Berner says other housing conditions, such as builders cutting asking prices and offering more incentives, bodes well for the coming year. Builders have also slowed construction on new builds, bringing a little more balance to the market.

That could mean more competition, sooner or later.

Improving affordability conditions haven't yet brought significantly more buying activity, says Lawrence Yun, chief economist at the National Association of Realtors®. NAR's own Pending Home Sales Report, which uses a different methodology, tracked January home sales at a slight year-over-year decline.

But Yun says the coming year could be an opportunity for buyers to come back. About 5.5 million households that couldn't qualify for a mortgage a year ago are eligible at today's lower rate.

"Most newly qualifying households do not act immediately, but based on past experience, about 10% could enter the market—potentially adding roughly 550,000 new homebuyers this year compared with last year,” Yun says.