Published February 5, 2026

Monthly Real Estate Insights December 2025

Written by Dale Lookabaugh

Monthly Real Estate Insights December 2025 header image.

Midland Real Estate Market

December 2025 Update

Why Mortgage Rates Don’t Always

Drop When the Fed Cuts Rates

You may hear headlines about the Federal Reserve cutting rates and expect mortgage rates to drop right away but it doesn’t always work that way.

The Fed controls short-term interest rates (like credit cards and auto loans). Mortgage rates are long-term loans and are influenced instead by the bond market and inflation expectations.

If investors believe inflation could stay higher over time, they demand higher returns, which keeps mortgage rates elevated even after a Fed rate cut. In many cases, rate cuts are also anticipated and priced in long before they happen.

That’s why mortgage rates don’t always move when the Fed does. Our advice is to focus less on trying to time the perfect rate and more on what fits your long-term goals. When rates do improve, refinancing is always an option.

If you have questions about the market or your next move, call The Bill Lanier Team, we’re always here to help. If you’re thinking about selling or buying call The Bill Lanier Team at 432-682-1144 to discuss your next best step in today’s market.

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A Year of Supply Buildup and

Housing Demand Roller Coaster

The 2025 real estate market reminds me a lot of a hiking trip I took to Wheeler Peak in New Mexico. At 13,167 feet, it’s the highest peak in the state. The hike is just over 8 miles out and back with nearly 3,000 feet of elevation gain. I thought I was ready. I had trained a little bit and felt confident heading into it. We started strong, moving through the forest at a steady pace. Everything felt manageable, until the elevation gain kicked in and didn’t let up. My legs cramped, my lungs fought for oxygen in the thin air, and once we cleared the tree line, the wind pushed back hard. It was tough, but I made it through and I’m better for it.
In many ways, that’s what the Midland housing market felt like this year.

Housing supply in Midland climbed 55% in 2025. Our lowest inventory point was 435 homes in February, and we peaked in October with 674 homes on the market. As of December, we’re sitting at 597 active listings. However, between November 15 and December 12 (the day I'm writing this masterpiece), 71 homes were pulled off the market. Many of those are likely to return in January. This mirrors a national trend. CNBC recently reported that delistings are occurring at an unusually high rate. According to Realtor.com, delistings are up 45.5% year-to-date and nearly 38% higher than October 2024.

Demand told its own story this year. The first quarter started strong, with homes under contract rising from 117 to 241. Demand peaked in June at 293 homes under contract. When the Fed made its first rate cut in September, it brought another wave of buyers into the market. Those buyers acted wisely, they secured the best rates seen in the last three years and had more than 650 homes to choose from. Even now, demand remains solid. For December 2025, homes under contract are up compared to the past two years, about 50 more than December 2023 and 2024.

Overall, the Midland real estate market has shown impressive resilience. The average sales price is up 1% year over year, and average days on market dropped to 41 days, compared to 46 last year. Homes are selling, prices have held and well priced homes continue to find buyers

As with any tough hike, success comes from preparation, pacing, and knowing when to push forward and that same approach will be key as we head into the next stretch of the market. The Bill Lanier Team is here to guide you through the real estate market ahead of us.

-Written by Dale Lookabaugh

Source: CNBC, “Home sellers are giving up at ‘unusually high rate,’ report says,” Dec. 8, 2025 — citing Realtor.com data showing delistings up 45.5% year-to-date and up nearly 38% from October 2024.