PROVIDENCE, R.I. (WPRI) — Rhode Island saw a surge in home sales last month, marking the state's most significant year-over-year upswing in a quarter-century. The Rhode Island Association of Realtors announced Thursday that the state's housing market saw a 30.3% rise in home sales in December. The spike marks the state's "largest annual gain in sales since January 1999." New data reveals that the median price of a single-family home in Rhode Island also rose to $470,000, which is 10% higher than it was the same time last year. Despite the surge in home sales, the number of closings and houses under contract dropped by nearly 3% in December. "The anticipation of further rate cuts by the Federal Reserve seems to have lit a fire in our housing market in December," R.I. Association of Realtors 2025 President Chris Whitten said. "When compared to the end of 2023, when sales were particularly low due to mortgage rates climbing toward 8%, it's easy to see why sales were so much higher this year." Though the national housing shortage appears to be correcting itself, the Ocean State remains primarily "in the grips of a sellers' market," according to the R.I. Association of Realtors. Though the number of homes listed for sale rose nearly 7% last month, the sharp uptick purchases continued to drain the state's housing supply. At the current rate of sales, if no new listings came on the market, inventory would be depleted in just 1.6 months. If no new listings were to come on the market, the state's housing inventory would be depleted in less than two months. (In order to have a balanced market, the state needs to have five to six months' worth of housing inventory.) "The Fed is expected to stall its rate cuts, so mortgage rates may not continue the downward trend that we anticipated last year," Whitten said. "That could pull some potential buyers back out of the market, helping to build the supply of homes for sale." Whitten noted that the "severe drought of new construction units, paired with those from out-of-state, particularly Massachusetts, looking at Rhode Island as a more affordable option," are preventing the state's market from cooling along with the rest of the country. "Many housing market experts have their eyes on Rhode Island as one of the nation's hottest housing markets here in 2025," Whitten said. The number of multi-family home sales held steady in December, rising just 1.5% from the year prior. However, last month's median sales price of $545,000 represented a 13.5% hike. Whitten explained that multi-family homes are popular for investors and families whose income relies on collecting rent. "If you have a multi-family, a lot of Rhode Islanders consider that gold," he said, adding that new multi-family homes aren't being built at the same frequency as single-family homes are. The R.I. Association of Realtors also noted that condominium sales rose 23% in December, while the median price fell to $345,000. Close Thanks for signing up! Watch for us in your inbox. Subscribe Now Daily Roundup SIGN UP NOW