Sales Up 0.5% to 4.13M SAAR, But Year-Over-Year Still Negative: December 19 Release Buries the Lede

The official housing market press release dated December 19, 2025, leads with a 0.5% month-over-month rise in existing-home sales to 4.13 million SAAR and celebrates a “third straight month” of gains. Yet in the same breath, it reports a 1.0% year-over-year decline in sales—a reminder that demand remains weaker than last year. It also claims “inventory growth is beginning to stall,” despite a 5.9% month-over-month inventory drop to 1.43 million and a decline in months’ supply to 4.2 from 4.4. That’s not stalling; that’s a monthly contraction.

Here’s what the data reveals:

• Sales rose 0.5% MoM to 4.13M SAAR, but fell 1.0% YoY; the market is still softer than a year ago.

• Inventory fell 5.9% MoM to 1.43M, while months’ supply tightened to 4.2 from 4.4—contradicting the “stalling” inventory narrative.

• Versus last year, inventory is up 7.5% (from 1.33M) and months’ supply is higher (4.2 vs. 3.8)—today’s market is looser than last November despite the monthly squeeze.

• The median price rose 1.2% YoY to $409,200, marking the 29th consecutive YoY increase—hardly an affordability victory in the absence of wage or mortgage payment data.

• Regional splits: MoM, sales climbed in the Northeast and South, were flat in the West, and fell in the Midwest. YoY, the Northeast and South were unchanged, while the Midwest and West declined.

• The release asserts that lower mortgage rates drove gains and that wages outpaced home prices—but provides no actual rate or wage figures.

Here’s the core data at a glance:

The Monthly Lift vs. the Annual Drag

The headline hides the tension: +0.5% MoM feels constructive, but -1.0% YoY says the recovery hasn’t closed the gap to last year. The release even cites a data point from November 2024 of 4.17M SAAR, which cross-checks the 4.13M SAAR this November—precisely the 1.0% decline now reported. “Momentum” is not the same as “health.”

Inventory: Not “Stalling”—Shrinking on the Month, Looser Year Over Year

The claim that inventory growth is “beginning to stall” is at odds with a 5.9% MoM decline to 1.43M. The monthly picture tightened—months’ supply fell to 4.2 from 4.4—but the annual comparison shows a looser market: inventory up 7.5% YoY and months’ supply at 4.2 vs. 3.8 last year. Translation: tighter vs. October, looser vs. November 2024. That nuance matters for pricing power and transaction velocity.

Affordability Claims Without Receipts

The release asserts that “wage growth is outpacing home price gains” and that lower mortgage rates drove the “third straight month” of sales gains—without providing a single wage or mortgage-rate figure. Meanwhile, the concrete housing data show:

• Median price up 1.2% YoY to $409,200.

• 29 consecutive months of YoY price increases.

• Sales still down YoY (-1.0%).

Those three facts are consistent with persistent affordability stress, not relief. If wages and rates are doing the heavy lifting, show the numbers: monthly payment burden, debt-to-income at prevailing rates, and price-to-income ratios. Without that, the affordability narrative is marketing copy.

Product Mix and Regional Drift

Single-Family vs. Condo: Partial Story, Full Ambiguity

We’re told single-family sales rose 0.8% MoM and “outperformed condos.” But the condo figure is missing, and the release warns that condo fees are rising—again, no data. It also notes the “typical” condo price is 13.5% lower than single-family, but without volumes or fee schedules, the affordability edge is speculative. Price levels without carrying-cost math don’t answer the affordability question.

Regional Reality Check

Month over month: Northeast and South up, West flat, Midwest down. Year over year: Northeast and South unchanged, Midwest and West down. That pattern points to ongoing softness in the Midwest and West—important for builders, lenders, and REITs with geographic concentration. Yet the release supplies no regional price or inventory levels, limiting insight into where the stress—or opportunity—is most acute.

The Missing Metrics

The release characterizes distressed sales as “at historic lows” and claims “housing wealth at an all-time high.” Both statements arrive unaccompanied by figures. Also missing:

• Days on market: A leading indicator of demand intensity.

• First-time buyer share: Critical for assessing affordability thresholds.

• Cash-buyer share: Signals credit conditions and investor participation.

• Condo fee data: Essential to judge actual carrying costs.

• Mortgage rate details: If rates drove sales, show the basis points.

When key stress indicators vanish, investors should lean heavier on the numbers we do have: YoY sales negative, prices still rising, and inventory looser than a year ago, even with a seasonal monthly tightening.

What This Means for Markets

Equities

• Homebuilders: The monthly inventory squeeze and MoM sales uptick can support near-term sentiment. But the YoY sales decline and 29-month price inflation argue that the demand pool is still constrained. Favor builders with strong spec-turn discipline, deep finished-lot pipelines, and exposure skewed to the South and Northeast, where MoM demand firmed and YoY didn’t deteriorate.

• Building products and brokers: Volumes remain the governor. With sales still -1.0% YoY, expect uneven throughput; focus on companies with retrofit/remodel exposure over pure turnover dependency.

• Single-family rental REITs: Persistent price gains and ambiguous affordability improve rental demand durability. Watch Midwest/West softness for acquisition spreads, but underwriting must reflect regional drag.

• Multifamily and condo-adjacent names: The “condo affordability” angle lacks data and is undermined by rising fees. Be selective and avoid over-indexing to fee-sensitive urban product until cost transparency improves.

Credit and Rates

• Mortgage credit: A looser YoY inventory backdrop with prices still rising implies measured origination volumes. Credit performance should remain stable given the absence (so far) of distressed supply, but the lack of distressed figures is a risk flag. Favor prime paper and conservative LTV buckets; avoid chasing yield where documentation gaps thicken.

• MBS prepay risk: With sales still below last year and no concrete rate-based refi signal provided, prepayment risk looks contained in the near term. Focus on specified pools with lower turnover characteristics.

Macro Read-Through

• The YoY demand softness alongside ongoing price gains is the awkward combination that keeps shelter inflation sticky even as transaction velocity lags. If policy or rate relief materializes, the first-order effect likely shows up in volumes, not immediate price disinflation.

• The monthly inventory contraction appears seasonal; the YoY increase in inventory and months’ supply points to a market less tight than last year—key for 2026 pricing power.

Looking Ahead: What to Watch

• Hard affordability data: wages, effective mortgage rates, and monthly payment indices to validate or refute the “affordability improving” claim.

• Demand quality: first-time buyer share, days on market, and cash-buyer mix.

• Regional detail: level and trend data for the Midwest and West, where YoY sales are contracting.

• Supply flow: new listings and housing starts vs. active inventory—the supply context omitted in the release.

• Product mix: actual condo sales volumes and fee trajectories to assess whether condos truly regain affordability share.

The Investor Takeaway

Ignore the headline victory lap. The December 19 release dresses up a 0.5% MoM gain to 4.13M SAAR while downplaying a -1.0% YoY sales decline, inventory up 7.5% YoY, and prices up 1.2% YoY for the 29th straight month. Near-term positioning favors high-quality builders with strong execution and exposure to relatively resilient regions; rental housing should continue to benefit from affordability friction. Keep leverage modest in origination-sensitive names, prioritize cash-generative operators over volume-dependent stories, and demand data—on rates, wages, and distress—before buying the recovery narrative at face value.