Real Estate Market Wrap December 2025
**Key Trends** December closed with signs of measured normalization across U.S. real estate. Affordability edged up modestly as rate volatility eased, while inventory—after tightening earlier in the month—began to normalize. Demand signals remained
Key Trends
December closed with signs of measured normalization across U.S. real estate. Affordability edged up modestly as rate volatility eased, while inventory—after tightening earlier in the month—began to normalize. Demand signals remained mixed: purchase applications rose double‑digits in 2025 but existing‑home sales only showed modest gains, highlighting a conversion gap. Capital is reallocating: stronger investor demand for CRE and rising DSCR (debt-service‑coverage) loan originations coexist with proptech-driven mortgage access that broadened buyer pools. Regulatory and legal pressure—antitrust scrutiny and NAR reforms—are compressing traditional commission dynamics. Separately, big‑ag consolidation elevated policy and investor risk in farmland and food‑supply real assets, and retiree RMD/liquidity flows continued to boost downsizing and rental demand.
Notable Events
12/27–12/28: Antitrust scrutiny and NAR-related reform headlines coincided with rising inventory signals. 12/29: Big‑ag consolidation stories increased scrutiny on farmland valuations and policy risk. 12/30–12/31: Supply tightness in select markets pushed pending sales higher while proptech lending and alternative mortgage channels expanded buyer access. 12/31: CRE showed signs of stabilization as investor demand rose, juxtaposed with AI opportunities and attendant legal/regulatory risks.
Performance
Transaction activity: purchase‑app volumes outpaced closings, underscoring the conversion shortfall. Prices posted modest, regionally varied gains rather than broad acceleration; volatility moderated into month‑end. CRE pricing and lending demand stabilized, while farmland pockets showed downward pressure where consolidation risk was concentrated.
Outlook
Near term: expect continued inventory normalization and slower price momentum, with proptech and DSCR lending reshaping financing flows. Key risks: legal/regulatory developments (NAR/antitrust), farmland policy from ag consolidation, and the purchase‑app to close conversion rate — monitor DSCR spreads, lender underwriting shifts, and any litigation headlines for volatility triggers.