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. There are good opportunities starting to emerge, but of course, there are risks that need mitigating too. We’re gonna get into all of that, both the risks and opportunities in today’s episode. First, we’re gonna talk about home prices. Then we’ll talk about some good news finally on housing affordability. We’ll get into a new trend that’s emerging with sellers and how they are trying to wrestle back control of the housing market. And we’ll end talking about underwater mortgages and this article that I keep seeing everywhere in the news these days. I will address head on if underwater mortgages is a potential risk to the market going into next year. That’s the plan for today. Let’s get into it. First up, major headlines here.
What’s going on with prices? Everyone wants to know. Well, according to Redfin, prices are up 1.4% year over year. That’s still relatively good. We are not in any sort of crash. I would still call that a correction because prices are down in real terms. 1.4% is a little bit flattish to me, but…