This could be the most encouraging sign for the housing market in years. It’s the final month of 2025, and the housing market has flipped from this time last year. Real prices are down, mortgage rates are near a percent lower, inventory is stabilizing, and affordability…it’s actually improving. But hints at a wave of underwater mortgages are making people nervous. With the number rising, is this the “distress” signal many have been waiting for?
Welcome to our last housing market update of 2025. We’re getting into it all: home price, mortgage rate, and inventory updates, plus a new seller trend that is causing serious confusion, and could be the final nail in the “housing market crash” coffin. With sellers doing what nobody expects, next year could get interesting.
More homeowners are falling “underwater” on their mortgages. Is this a 2008 repeat or just a blip on the real estate radar? Some economists are worried about rising delinquencies, but a high-level view of the data could point to an entirely different conclusion.
Dave:
We have made it to the end of 2025, but the housing market continues to change and shift and confuse as it has all year. But today we are going to make sense of it. This is our December 2025 housing market update. Hey everyone. It’s Dave Meyer. I’m a housing market analyst and I’ve been a real estate investor for 15 years and I am the head of real estate investing here at BiggerPockets. And it’s hard to believe last housing market update of the year. It has been a truly wild year in the economy and the housing market. We started with one that was rapidly cooling. Rates were in the sevens. Things were feeling stalled out. Inventory was going up. And fast forward to today, although it might not feel like much has changed, a lot actually has changed. I see it in the data wherever I look.
We are very much in a different situation heading into 2026 as we were in 2025. And honestly, I think there’s some good news here….