December is always a month for reflection and transition, as the year comes to a close and a new one approaches. December is often a quieter time, marked by the holiday season and time spent with family and friends.

 

December Fun Facts

  • December was originally the 10th month of the Roman calendar.
  • It includes the shortest day of the year (winter solstice)
  •  Day Count Changes: December originally had only 30 days. It was shortened to 29 days around 700 BC and finally increased to 31 days under the Julian calendar reform.
  • December has three birthstones: turquoise, zircon & tanzanite.
  • The Bill of Rights: The first ten amendments to the U.S. Constitution officially became law on December 15, 1791

Gratitude & Optimism

For many, December also brings a sense of gratitude for the year behind us and renewed optimism and goal setting for the year ahead. At Canvas Mortgage we share that sense of gratitude for all that 2025 brought and to all the individuals and families we helped.

We are especially grateful to first-time homebuyers we helped to secure their dream of homeownership. Thirty-four (34%) percent of all loans we made in 2025 were for first-time homebuyers. This just goes to show the dream to own your home is still alive. It also should be an encouragement to would-be, first-time home buyer to pursue your dream.

 

December 2025 Housing & Mortgage Market: A Shift Towards Normalization

In December 2025, the U.S. housing and mortgage market is settling into a more balanced, albeit still challenging, environment. A gradual decline in mortgage rates has provided some relief to buyers, while an increase in inventory has helped moderate home price appreciation.

 

30-year fixed-rate mortgages —

  • The national average generally stayed in the ~6.15%–6.30% range during December 2025.
  • According to weekly Freddie Mac surveys, the 30-year fixed rate ended the month around 6.15%–6.18%, a slight dip toward year-end and the lowest level seen in 2025. Mortgage rates in December remained elevated compared to the ultra-low levels of a few years ago, but they were lower than the near 7.00% rates seen early in 2025.
  • This modest easing helped bring some buyers back off the sidelines, particularly those who had delayed moving plans in hopes of better financing conditions. While rates are still a major factor in monthly payments, the sharp rate volatility of the past few years has begun to settle.

FHA Increases Loan Limits

For 2026, the new forward mortgage loan limits are as follows:

  • $541,287 for one-unit properties
  • $693,050 for two-unit properties
  • $837,700  for three-unit properties
  • $1,041,125 for four-unit properties

The FHA’s annual adjustment of loan limits plays a crucial role in sustaining access to affordable credit for first-time and moderate-income borrowers, especially in markets with elevated price levels. By updating these limits, HUD aims to preserve affordability while aligning its insurance programs with prevailing market conditions.

 

Median U.S. home prices

  • By late 2025, the national median existing-home price was roughly $415,000–$433,000, depending on the data source and timing of the report. This reflects modest price growth compared with earlier in the year and shows relative stability amid seasonal a slowdown.
  • Trend context — Home price growth slowed throughout 2025, with annual increases much lower than seen during the pandemic boom. Most markets experienced modest gains or near-flat pricing in the final months of the year.
  • Regional variations — Prices vary widely across the country. Higher-cost areas (e.g., large coastal metros) remain well above the national median, while more affordable regions continue to have lower typical sale prices.

Home prices nationally remained relatively firm, supported by limited housing supply. Many homeowners continue to hold onto low-rate mortgages obtained in prior years, keeping resale inventory tight. As a result, prices have largely stabilized rather than declined, with some local markets seeing small seasonal dips typical for winter months.

For buyers, conditions in December offered a few advantages. With fewer people shopping during the holidays, competition eased in many areas, giving buyers more room to negotiate on price, closing costs, or seller concessions. Builders also continued to use incentives—such as rate buydowns or closing cost assistance—to help move inventory.

 

Affordability

Affordability remains the biggest hurdle. In addition to higher home prices and mortgage rates, rising property taxes and insurance costs have added pressure to monthly budgets. Buyers are increasingly focused on total payment rather than just the purchase price, making careful budgeting and loan planning more important than ever.

A Realtor.com analysis shows that down payment affordability improved in 2025, with the typical U.S. household needing significantly less time to save for a home purchase, easing a major constraint on buyer entry. The report estimates that buyers now require about seven years of savings at the national average personal savings rate to reach a median U.S. down payment, a notable improvement from the roughly 12 years needed in 2022 when affordability pressures peaked.

 

Looking to 2026

Looking ahead to 2026, many economists expect the housing market to continue moving at a measured pace rather than experiencing dramatic swings. Employee wages are expected to outpace housing price growth in 2016 in many areas of the country which should help with affordability.

For consumers, success in this environment comes down to preparation, understanding financing options, working with experienced professionals, and focusing on long-term goals rather than trying to time the market perfectly.