The good news: The frozen US housing market is showing early signs of thawing after prolonged stagnation.

Existing home sales rose 5.1% MoM in December, the fourth straight monthly increase and the longest streak of gains since 2020, per the National Association of Realtors.

• The jump was more than double expectations and the largest monthly gain since February 2024.
• Sales rose 1.4% YoY, a return to growth after a 0.7% decline in November.

The not-so-good news: Even with December’s lift, overall activity is depressed. Total existing home sales reached just 4.06 million last year, the lowest level since 1995.

• Adjusted for population growth, the picture looks even bleaker. There were just three home sales per 100 US households, the lowest ratio since 1982, when the US economy was in recession and mortgage rates hovered near 16%, per First American Financial data cited in The Wall Street Journal.
• The momentum may already be fading. Pending home sales fell 5.9% MoM in December, dropping to the lowest seasonally adjusted level on record outside of April 2020, when the COVID-19 pandemic froze the housing market, per Redfin, which began collecting data in 2012.
• Affordability remains a major concern. Nearly three-quarters (74%) of US adults say housing costs cause stress, per a recent Associated Press survey. And while the median home sale price rose just 0.5% YoY to $428,742 in December, the cumulative effect of years of price increases has left many buyers priced out.

Implications for retailers: The stagnant housing market has been a persistent drag on retailers that benefit from household moves, including Home Depot, Crate & Barrel, Wayfair, and Best Buy. Fewer moves mean fewer “reset moments,” when consumers typically spend on big-ticket home projects and items like appliances and electronics.

The implications extend well beyond housing-linked categories. Many of the same forces limiting the market—elevated costs, a softening labor backdrop, and broader economic uncertainty—are also likely to dampen consumers’ appetite for big-ticket spending more broadly, which could limit upside for many discretionary retailers this year.