2025 Recap Market Report

So how did the year truly unfold?

Nationally, existing home sales remained slow. Realtor.com attributes much of this to the ongoing “locked-in effect.” Four out of five homeowners now have mortgage rates well below 6%, making the idea of selling and taking on a new mortgage far less appealing. Many sellers chose to take their homes off the market instead of reducing their asking price—an understandable but impactful trend.

What’s happening with mortgages?

Mortgage rates finally eased toward the end of 2025, dipping into the low 6% range. Most economists expect rates to hover there throughout 2026.

Even with three Federal Reserve rate cuts last year, mortgage rates still had a mind of their own. Many people assume 30-year mortgage rates move in lockstep with Fed decisions, but that’s not always true. Daniel Halvorsen’s graph (linked or inserted here) is a great visual example of how the two rates can move independently.

What’s happening with new construction?

For builders, 2025 brought a unique set of pressures. The threat of tariffs and a slowing pace of buyers made it a tougher year for new home starts. In response, incentives grew—significantly. When you factor in rate buy-downs, closing cost help, and upgrade packages, new construction often ended up being more affordable than resale homes. For buyers watching their budgets, this became a bright spot in the market.

What happened here in Northeast Florida?

Our local story had its own rhythm. Inventory peaked in May, then steadily declined through the second half of the year. By November, we were at our lowest inventory point of 2025. Today, we’re sitting at 5.5 months of supply, which is widely considered a balanced market.

Almost half of all homes sold last year went under contract in the first 60 days. Many others remained on the market because sellers were “testing the market” with aspirational pricing. In the end, local prices held steady—neither rising nor falling in a significant way.

What can buyers expect in 2026?

Buyers may see a bit more breathing room this year. As inventory grows, so does bargaining power. Negotiations around price, seller concessions, and repairs should become more realistic.

New construction continues to be an attractive option, especially when incentives bring overall costs below resale pricing.

We’re also seeing more specialized lending programs—such as doctor and attorney loans—that help buyers with strong income potential but limited down-payment funds.

What can sellers expect in 2026?

We’re likely heading into another year of steady but measured activity. With mortgage rates holding in the 6% range and inventory increasing, sellers should expect a more competitive environment.

Accurate pricing will be essential. Homes priced at—or slightly below—market value will see the most success. This is not the year for “wishful” pricing. Flexibility around terms and repairs will play an important role as well.

If you’d like a personalized update on your home’s value or want to talk through buying plans for 2026, I’m always here as a resource. The market may be complex, but with good information and thoughtful guidance, it can also be full of opportunity.