Each week, I analyze the evolving dynamics of the market, identifying emerging trends, shifts in momentum, and key considerations for real estate professionals. Last week, mortgage rates continued their gradual decline in the final weeks of 2025, according to Freddie Mac, offering more favorable financing conditions for buyers entering the post‑holiday market. The average 30-year fixed mortgage rate dipped to 6.18%, remaining just above the lowest level of the year and staying within a narrow range for nearly three months. With limited economic data expected in the near term, rates are anticipated to drift rather than move sharply in either direction. At the same time, housing inventory growth has slowed significantly from more than 30% year-over-year to 13.54%, reflecting a reduction in new listings after May and renewed buyer demand. Improving mortgage rate spreads and 19 consecutive weeks of rising purchase applications highlight growing momentum heading into 2026. In Washington, lawmakers advanced H.R. 6644, the bipartisan Housing for the 21st Century Act, which seeks to address affordability challenges by promoting federal best practice zoning frameworks, streamlining regulatory processes, and supporting more efficient homebuilding, measures that industry groups say could expand supply and reduce barriers for builders.
Here’s what stood out in the fourth week of December.
December 29, 2025
MERRY CHRISTMAS: 30-YEAR MORTGAGE RATES DIP LOWER. Mortgage rates edged slightly lower over the past week as financial markets absorbed a mix of economic signals, with the average 30‑year mortgage rate dipping to 6.18% from 6.21%, according to Freddie Mac. This marks a notable improvement from the 6.85% level seen a year ago and continues a multi‑month trend of rates holding within a narrow range near 6.2%. Freddie Mac chief economist Sam Khater described the easing in rates as a welcome development for prospective buyers, noting that the recent stability offers a measure of confidence as the housing market heads into the new year. Full story from YAHOO! FINANCE →
- Why this Matters: Even small rate moves change real monthly payments and borrowing power, and that’s often enough to bring sidelined buyers back into the conversation. Stability matters, too: when rates hold a tight range, households can budget with more confidence and move from “thinking about it” to “ready to go.”
WHY DID THE GROWTH RATE OF HOUSING INVENTORY DROP BY HALF THIS YEAR? Housing inventory growth has slowed considerably from more than 30% year-over-year earlier in the year to 13.54% today, reflecting a pullback in new listings after their peak in late May and a resurgence in buyer demand that pushed existing home sales to a nine‑month high. The seasonal decline in new listings is now underway but improving mortgage‑rate spreads are providing meaningful support to the market. While spreads reached extreme levels in 2023, which would have pushed today’s mortgage rates to roughly 7.30%, their return toward normal ranges is a significant advantage for the housing sector and may continue to provide benefits into 2026. Purchase application activity has now posted nineteen consecutive weeks of positive weekly and annual growth, reaching multiyear highs, while pending home sales remain stronger than in 2023 and 2022 and slightly ahead of 2024, signaling sustained momentum as the market heads into the new year. Full story from HOUSINGWIRE→
- Why this Matters: A slower pace of inventory growth can tighten choice and keep competition brisk. At the same time, healthier spreads are a real win for households on the cusp of buying. Rising purchase apps and firmer pending sales tell us more buyers are re-engaging, a trend that can influence pricing and availability at the local level.
HOUSE ADVANCES NEW BIPARTISAN BILL TARGETING HOUSING AFFORDABILITY CRISIS. A major bipartisan effort to address the nation’s housing affordability crisis advanced as the House Financial Services Committee voted 50 to 1 to move H.R. 6644, the Housing for the 21st Century Act, to the full House for consideration. The bill, which would still require Senate approval and President Donald Trump’s signature, focuses on creating a federal best practices framework for local zoning and land use policies that communities could voluntarily adopt to streamline development. It also includes a Senate proposal to develop pattern books of prereviewed home designs to make it easier for builders to comply with local building codes and accelerate construction. Committee Chair French Hill emphasized that the legislation aims to modernize outdated programs, remove unnecessary federal requirements, and expand local control, steps he says are essential to increasing housing supply and improving affordability across the country. Full story from REALTOR.COM →
- Why this Matters: Structural barriers like slow approvals, inconsistent standards and regulatory friction have kept supply tight. Efforts that make zoning clearer and reviews faster can help builders deliver more homes at lower cost, expanding choices and easing pressure for households across price points.
THE BOTTOM LINE: We’re closing the year with steadying rates, a moderation in inventory growth, and policy movement aimed at supply and affordability. Rates holding in the low‑6s are improving the math for households getting off the sidelines. Slower inventory growth means your local market may feel tighter — which makes preparation, pricing discipline, and clear guidance even more important. And with spreads improving and purchase apps rising 19 weeks in a row, momentum is building into 2026.
Disclaimer: this is a compilation of industry news from trade media and industry groups; it does not share any forward-looking predictions or projections.
