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Updated: December 3, 2025 / 8:26 AM EST / CBS News
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**December home‑price outlook**
The housing market is feeling the chill of higher mortgage rates and a softer job market. Even with average prices above $500,000, many first‑time buyers are hoping for relief from the steep cost of both loans and homes. Experts predict that December could see a modest rise in prices, especially if the Federal Reserve cuts rates—though a cut is not guaranteed. Traditionally, the holiday season cools the market, but that may not happen this year.
**Key expert insights**
- **Nadia Evangelou (National Association of Realtors)**: Lower mortgage rates are the main catalyst for price increases. With supply still tight, a surge in listings is needed to curb prices, which isn’t expected soon.
- **John Walkup (UrbanDigs)**: Easier affordability from lower rates boosts transaction volume and pushes prices higher.
- **David Harris (Coldwell Banker Warburg)**: Midwest markets offer more affordability and still attract buyers despite low inventory, unlike many Sunbelt and West Coast areas that remain pricey.
**Regional variations**
Price movements depend heavily on location. Some markets have balanced inventory and demand, keeping prices stable, while others—especially large metros—continue to struggle with affordability. The Midwest tends to be more affordable, whereas Sunbelt and West Coast regions still price out many middle‑class buyers.
**What drives price changes**
1. Transaction volume
2. Income levels and expectations
3. Mortgage rates
4. Market momentum
As rates fall, competition rises. Several cities are on the cusp of a price uptick, making now a potentially good time to buy.
**Tips for December buyers**
- Secure a pre‑approval or proof of funds before making an offer.
- Study your local market’s recent price trends and inventory levels.
- Stay alert to Fed rate decisions that could lower mortgage rates.
- Partner with a local agent who knows neighborhood dynamics, job growth, and off‑market opportunities.
**Bottom line**
December and the early 2026 period are likely to see price increases, driven by limited inventory and rising demand. Even a 0.25% drop in mortgage rates can save thousands over a loan’s life. The holiday season often brings less competition and more motivated sellers, so don’t dismiss the end of the year as a buying window. Monitor rates closely and run the numbers—small changes can make a home more affordable.
