Home sales rose 0.5% in November, marking the third consecutive month of gains. However, 2025 sales are expected to hit a 30-year low. Lower mortgage rates likely played a role, with homes selling in November going under contract during months with steady rates around 6.2%.

Despite recent improvements, the housing market is still struggling due to high prices, elevated mortgage rates, and consumer unease. Home sales for the year are on track to be the lowest since 1995, and November’s increase fell short of analyst expectations.

Sales increased in the Northeast and South, remained flat in the West, and dropped in the Midwest. Compared to the previous year, sales are down by 1%. The winter months typically see a slowdown in sales activity, with housing inventory dropping by 5.9% to 1.43 million units in November.

Looking ahead, the health of the labor market and trends in inflation will significantly impact the housing market in the coming year. Economic resilience and affordability will be crucial, as the market faces challenges from high mortgage rates and consumer discontent.

Selma Hepp, chief economist at Cotality, emphasizes the need for a strong labor market, income growth, and economic resilience for a housing market rebound. The affordable crisis, high mortgage rates, and consumer discontent continue to pose challenges that need to be addressed.

Claire Boston, a Senior Reporter for Yahoo Finance, covers housing, mortgages, and home insurance. Stay informed with the latest personal finance news on investing, debt management, home buying, retirement, and more. Read the latest financial and business news from Yahoo Finance for updates on the market.

Read more at Yahoo Finance: Home sales ticked up for third straight month, but the market is still stuck in a deep slump