US Home Sales Surge to Near 3-Year High as Affordability Improves

WASHINGTON, D.C. – December 29, 2025 – The U.S. housing market showed a powerful surge of momentum in November, as pending home sales jumped to their highest level in nearly three years. A new report from the National Association of REALTORS® (NAR) reveals that contract signings rose a seasonally adjusted 3.3% from the prior month and 2.6% compared to the same period last year, signaling a potential turning point for a market that has contended with affordability challenges.

The increase marks the strongest performance of 2025 and the best since February 2023, suggesting that a combination of improving financial conditions and greater housing availability is successfully luring buyers back into the market. The data, based on NAR's Pending Home Sales Index (PHSI), serves as a crucial forward-looking indicator for the health of the housing sector, as it tracks signed real estate contracts for existing homes that have not yet closed.

A Nationwide Rebound

In a sign of broad-based strength, the recovery in contract activity was not confined to a single hot-spot region. All four major U.S. regions posted month-over-month and year-over-year gains in November, a rare and encouraging sign for the national market.

The West led the charge with a remarkable 9.2% increase in pending sales from October, while also recording a 2.4% rise from the previous year. The South, the nation's largest housing region, saw a solid 2.4% monthly gain and boasted the strongest year-over-year performance with a 3.3% increase.

The positive trend continued in the Northeast, which saw contract signings climb 1.8% for both the month and the year. The Midwest also contributed to the national upswing with a 1.3% monthly increase and a 2.2% annual gain. This widespread growth suggests that the underlying factors driving the rebound are having a national impact.

The Driving Forces: Affordability and Inventory

According to NAR Chief Economist Lawrence Yun, the November data confirms that "homebuyer momentum is building." He attributes the robust activity to a confluence of positive economic trends that are making homeownership more attainable.

"Improving housing affordability–driven by lower mortgage rates and wage growth rising faster than home prices–is helping buyers test the market," Yun stated in the report. This shift marks a significant departure from the conditions that sidelined many prospective buyers over the past two years, where soaring rates and stubborn price growth created a difficult environment.

In addition to improved affordability, an expansion of housing stock is playing a pivotal role. "More inventory choices compared to last year are also attracting more buyers to the market," Yun added. A greater selection of homes for sale helps alleviate the intense bidding wars that characterized the post-pandemic market and gives buyers more leverage and time to make considered decisions.

Agent Confidence Points to Continued Momentum

The optimism is not just reflected in the sales data but also among the real estate professionals on the front lines. NAR's November REALTORS® Confidence Index survey showed a notable uptick in positive sentiment for the near-term future.

According to the survey, 22% of NAR members now expect an increase in buyer traffic over the next three months. This figure is a significant improvement from the 17% who felt that way in October. While still below the 24% recorded a year ago in November 2024, the month-over-month increase indicates a clear shift in expectations as 2025 comes to a close.

Sentiment regarding sellers is also improving. The survey found that 18% of real estate agents anticipate a rise in seller traffic, up from 16% in the prior month. This suggests that more homeowners may be preparing to list their properties, which would further help to balance the market and provide more options for eager buyers.

A Shifting Landscape for Buyers and Sellers

The November surge offers a tangible sign that the housing market may be entering a new, more balanced phase. For prospective buyers who have been waiting on the sidelines, the combination of lower mortgage rates and more available homes presents a window of opportunity that has been closed for much of the last two years. The increased affordability, stemming from wage growth finally outpacing price appreciation, means purchasing power is on the rise.

For sellers, the report is equally encouraging. The increase in buyer traffic indicated by the contract signings and agent confidence suggests that demand is firming up. While the days of guaranteed, multiple-offer scenarios may be waning due to increased inventory, well-priced and well-presented homes are likely to attract significant interest. The growing optimism among sellers could also lead to a virtuous cycle, where more listings encourage even more buyers to enter the fray.

As the market heads into the new year, these improving confidence levels from both the buyer and seller sides could create a more dynamic and fluid environment than has been seen in recent years. The next key data points to watch will be the existing-home sales figures for December, which are scheduled for release on January 14 and will confirm whether November's signed contracts translated into closed transactions.