US previously owned home sales climbed in December to the fastest pace since 2023, a welcome sign for a housing market that has lacked momentum for several years.

Contract closings rose 5.1% to a 4.35 million annualized pace last month, the highest since February 2023, according to figures released Wednesday by the National Association of Realtors. The pace exceeded all forecasts in a Bloomberg survey of economists.

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Borrowing costs have been easing and price growth has slowed, helping to fuel home purchases in all major regions of the US. The median sales price increased 0.4% from a year earlier to $405,400, the weakest gain in 2 1/2 years.  

"In the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth," NAR Chief Economist Lawrence Yun said in a statement.  

Last month's pace of demand points to a gradual recovery in 2026 for the nation's home resale market, which has been stuck near a low 4-million annual sales mark for the past three years. On an annual basis, sales in the three years through 2025 were the weakest since 1995.

Odeta Kushi, an economist at First American Financial, sees the nation's affordability crisis easing somewhat as incomes rise faster than home prices and a growing supply of houses expands choices for buyers. Mortgage rates fell to about 6.2% last week, the lowest rate in more than a year, and the NAR's affordability index — which tracks the typical family's ability to qualify for a mortgage loan — was at its highest point in almost three years as of November.

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"The most realistic expectation is continued, incremental progress, not a breakout," Kushi wrote in a note before the report. 

The supply of homes for sale rose throughout much of 2025 and reached a five-year high in July, helping to tame prices especially in the US Sun Belt. The increase in listings helped lead to a pickup in sales in the second half.

However in December, inventory rose 3.5% from a year ago to 1.18 million, according to NAR figures. Yun said he would prefer to see a 30% to 40% year-over-year gain. 

"I'm getting a little concerned about inventory not growing strongly," he said on a conference call. 

At the current sales pace, the supply is equal to 3.3 months' supply. 

President Donald Trump's administration has announced plans to make homes more affordable recently, hoping to get in front of mounting voter concerns about housing costs. Last week, the president proposed banning institutional investors from purchasing single-family rentals, and he asked Fannie Mae and Freddie Mac to purchase $200 billion in mortgage bonds to help lower borrowing rates. 

Sales in the South, the nation's biggest home-selling region, climbed to the fastest pace since February 2023. Contract closings were the highest in at least 10 months in all other regions.