Redfin Reports U.S. Pending Home Sales Drop 5.8% Year-Over-Year, Marking Largest Decline Since Early 2025
Redfin Data Signals Widespread Housing Market Slowdown
U.S. pending home sales experienced a sharp contraction in mid-December, according to the latest data released by real estate brokerage Redfin. The report indicates that pending sales fell 5.8% from the same period a year earlier during the four weeks ending December 14. This decline is the most significant year-over-year drop recorded since the start of 2025, underscoring mounting challenges for the housing sector.
Metro Areas Bear the Brunt of Declining Demand
The slowdown was not isolated, impacting the vast majority of major metropolitan areas across the country. Pending sales declined in all but six of the 50 most populous U.S. metro areas, suggesting a broad-based cooling of buyer interest. The most severe drops were concentrated in high-cost and high-growth markets:
- San Jose, CA: Pending sales plummeted 35.1% year over year.
- Houston, TX: Experienced a significant drop of 20.9%.
- Oakland, CA: Sales decreased by 17.6%.
These figures highlight how shifts in economic conditions, potentially including elevated interest rates or changes in consumer confidence, are disproportionately affecting certain regional markets.
Market Implications and Forward Outlook
The substantial drop in pending home sales is a critical indicator of future transaction volume and pricing trends. Pending sales are a leading metric, as they track homes that have gone under contract but have not yet closed. A sustained decline suggests fewer completed transactions in the coming months, which could pressure home prices, particularly in markets seeing the steepest drops.
While the Redfin report focuses on the decline, the underlying factors likely involve affordability constraints. Even as the typical U.S. home continues to sell, the rate at which new contracts are being signed is slowing dramatically. This dynamic suggests that while inventory remains tight, the pool of buyers willing or able to transact at current price and mortgage rate levels is shrinking. The 5.8% drop in pending sales serves as a clear signal to the market that the robust demand seen in previous periods is waning, potentially setting the stage for a more balanced, or even buyer-friendly, environment in 2026.
