Check out our Real Estate Sector page to explore more investment options.

U.S. existing home sales surged 5.1% month-over-month in December to an annualized rate of 4.35 million units, marking the highest level since March 2023 and the fourth consecutive month of growth. The 5.1% gain represents the strongest monthly increase since February 2023, signaling that the long-frozen housing market may finally be thawing. Yet even as transactions accelerate, the bigger picture remains sobering: sales remain 2.51 million units—or 37%—below 2020 peak levels, and full-year 2025 sales totaled 4.06 million, essentially unchanged from 2024’s 30-year low.

For real estate stocks, particularly REITs and homebuilders, the December data creates a paradox. Transaction volumes are improving at the margin, and the median home price reached $405,400 in December—a record high for any December and the 30th consecutive monthly gain year-over-year. Yet that 0.4% annual price increase represents the weakest gain in 2.5 years, suggesting the relentless price appreciation that characterized recent years is moderating. The question facing investors is whether this combination—modest volume growth and decelerating prices—will finally allow real estate equities to participate in the broader market rally, or whether structural headwinds will keep the sector lagging.