The U.S. housing market showed surprising strength at the end of 2025, as new home sales jumped to near four-year highs. Data from the US Census show that sales rose sharply in November and remained high in December, indicating strong demand despite high prices and borrowing costs. While some regions like the Midwest and West saw growth, others, such as the Northeast, experienced declines, showing that local economic conditions still play a big role in housing activity.
From an economic perspective, this trend reflects a classic supply-and-demand issue. Lower mortgage rates have made more households eligible to buy homes, but the limited housing supply continues to push prices upward. According to the National Association of Realtors, if more buyers enter the market without an increase in construction, affordability could worsen. Overall, the recent surge in sales suggests improving demand, but long-term stability will depend on increasing housing supply.
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