Stagnant mortgage rates, falling housing supply and ongoing economic uncertainty weighed heavily on homebuyers in December.

Pending home sales, a measure of signed contracts on existing homes, dropped 9.3% last month from November, according to the National Association of Realtors. Analysts were expecting a slight gain.

Sales were 3% lower than December 2024.

“The housing sector is not out of the woods yet,” said Lawrence Yun, chief economist for the Realtors. “After several months of encouraging signs in pending contracts and closed sales, the December new contract figures have dampened the short-term outlook.”

Sales fell month to month in all regions of U.S. and were higher annually only in the South.

Homes also stayed on the market longer in December, at an average of 39 days compared with 35 days in December 2024.

Mortgage rates in December, when these deals were inked, barely moved at all. The average rate on the popular 30-year fixed loan sat around 6.25%, according to Mortgage News Daily. That is slightly lower than it was over the summer, but consumers were also facing a market with fewer homes available for sale.

There were just 1.18 million homes on the market in December, down 9% from November, and matching the lowest inventory level of 2025. Inventory was up 12% from a year ago, but that is off an extremely low level.

“Consumers prefer seeing abundant inventory before making the major decision of purchasing a home. So, the decline in pending home sales could be a result of dampened consumer enthusiasm about buying a home when there are so few options listed for sale,” Yun added.