03/06/2026
That headline sounds dramatic, but the framing leaves out some pretty important context.
First, the comparison to 1995 ignores the biggest factor driving today’s market: inventory. We simply don’t have enough homes for sale. The U.S. has been structurally underbuilding for more than a decade, and millions of homeowners are locked into mortgages from the era of COVID-19 pandemic housing boom when rates were in the 2–3% range. That creates a “golden handcuff” effect where people don’t want to sell and take on a 6–7% loan.
Second, sales volume doesn’t equal demand. It reflects how many homes are available to transact. When supply is tight, transactions fall even if buyers still want homes.
A few realities behind the numbers:
• Inventory is still historically low relative to population.
• Millions of homeowners have mortgage rates under 4%, so they’re staying put.
• Builders slowed production after the 2008 Financial Crisis, which created today’s housing shortage.
• Population and household formation continue to grow.
So yes, sales volume has been down, but it’s not because housing demand disappeared. It’s largely because there aren’t enough homes to sell.
The interesting part of Yun’s comment is the fourth-quarter trend. Mortgage rates eased a bit and price growth slowed, which historically brings buyers back into the market. When inventory eventually improves, the pent-up demand is still sitting there.
In other words:
Low sales today are more about constrained supply than a collapse in housing demand.
That distinction matters a lot if you’re trying to understand where the housing market actually goes from here. 🏡📊
Annual home sales have now fallen for three straight years, with each year marking a new low not seen since 1995, when the country had 70 million fewer people than it does today.
Indeed, “2025 was another tough year for homebuyers, marked by record-high home prices and historically low home sales,” says NAR Chief Economist Lawrence Yun. “However, in the fourth quarter, conditions began improving, with lower mortgage rates and slower home price growth."
