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, the National Association of Realtors® reported existing home sales rebounded sharply in December, reaching their strongest pace in nearly three years. Meanwhile, new data from the Bureau of Labor Statistics showed that, while housing inflation continues to exert pressure on overall consumer prices, core consumer prices rose less than expected in December, supporting optimism that inflation is gradually easing as the Federal Reserve evaluates its next move on the federal funds rate. Against this backdrop, the Trump administration announced plans to introduce a proposal that would allow homebuyers to withdraw funds from their 401(k) accounts to help finance a down payment on a house, a departure from current rules that impose penalties on early withdrawals for first time home purchases.
January 20, 2026
EXISTING HOME SALES CLIMB TO NEAR 3-YEAR HIGH IN DECEMBER. Existing home sales ended 2025 with renewed momentum, climbing in December to their strongest pace in nearly three years. December sales reached an annual rate of 4.35 million, the highest monthly level of 2025, while full-year sales totaled 4.06 million, matching 2024. Inventory tightened significantly in December to 1.18 million units (3.3 months’ supply). The median existing home price increased to $405,400, marking 30 consecutive months of annual appreciation. Forward-looking contract activity also improved as the Pending Home Sales Index rose 2.6% year-over-year in November with support from lower mortgage rates, according to the National Association of Realtors. Full story from EYEONHOUSING →
- Why this Matters: The December rebound in existing home sales shows that demand is still there. People want to move, form households, relocate for work, or simply find a place that better fits their lives. The improvement in pending home sales also offers some relief. Lower mortgage rates are beginning to pull some buyers back into the market, and stronger contract activity suggests that conditions could gradually improve. This is a prime time to re-engage buyers who paused last summer and to counsel would-be sellers on pre-list prep so they’re ready to capture interest quickly.
INFLATION STEADY IN DECEMBER. Inflation remained steady in December, rising 2.7 percent on an annual basis, per the latest Bureau of Labor Statistics report. Core inflation increased 2.6 percent, driven largely by a 3.2 percent rise in shelter costs, which make up more than one third of the index and contributed more than half of total inflation in 2024. Monthly inflation picked up modestly in December, with the overall index rising 0.3 percent and core inflation increasing 0.2 percent. Shelter remained the largest contributor to the monthly increase. Full story from EYEONHOUSING→
- Why this Matters: Inflation trends directly influence the cost of everyday life, from housing to groceries to basic services. Even though overall inflation held steady in December, the continued rise in shelter costs carries real weight, since rent and housing expenses make up a large share of monthly budgets. The modest monthly increases in both overall and core inflation also signal that prices are still edging higher across a range of goods and services, shaping how far paychecks stretch and how consumers prioritize spending. Understanding these shifts helps households anticipate changes in their financial outlook and adjust their decisions as economic conditions evolve.
TRUMP ADMINISTRATION FLOATS 401(k) WITHDRAWALS FOR DOWN PAYMENT ON A HOME. The Trump administration plans to introduce a proposal that would allow Americans to use funds from their 401(k) accounts to help cover a down payment on a home. The concept would treat a portion of home equity as an asset within a retirement account, enabling the account to grow alongside home values. Supporters see this as a path to reduce the down-payment hurdle; critics warn it could add demand pressure in tight-supply markets and note impacts on long-term retirement growth. The proposal comes as the administration pursues broader efforts to improve housing affordability, while lawmakers from both parties continue to debate alternative approaches to expanding supply and reducing costs. Full story from REALTOR.COM →
- Why this Matters: A proposal that allows people to use a portion of their 401(k) savings for a home down payment touches two of the most important financial decisions consumers make: buying a home and preparing for retirement. For many households, the biggest barrier to homeownership is saving enough cash for a down payment. But as always, there are tradeoffs to consider. Your role as a coach for your clients: explain options and offer helpful connections (lenders, financial advisors) so they can make informed, personal decisions.
THE BOTTOM LINE: The housing market is showing early signs of renewed momentum, inflation is easing but still elevated, and policymakers are holding steady as they watch how these trends unfold. Stronger existing home sales and improving contract activity point to resilient demand, even as tight inventory and rising shelter costs continue to challenge affordability. At the same time, the Trump administration’s proposal to allow 401(k) withdrawals for down payments underscores how central housing access has become to the broader economic conversation.
Disclaimer: this is a compilation of industry news from trade media and industry groups; it does not share any forward-looking predictions or projections.
