Why U.S. Home Sales Ended 2025 on a High Note

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Alex Ossola (0:23)

The flurry of bank earnings this week shows American consumers are still spending and borrowing. Plus, US home sales finished 2025 on a surprisingly strong note. Can it continue?

Nicole Friedman (0:33)

Definitely, we could see a continuation of this increased activity. But if rates fall and that brings more buyers into the market, maybe that just pushes prices up faster and offsets any of that affordability improvement.

Alex Ossola (0:49)

And speaking of housing, Polymarket now lets Americans bet on whether home prices will go up or down. It's Wednesday, January 14th. I'm Alex Ossola for The Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today. Earnings out this week from some of America's biggest banks show that consumers continued to spend and borrow at a healthy clip at the end of last year, despite economic uncertainty. JPMorgan Chase reported yesterday and today we had Bank of America, Citigroup and Wells Fargo. Collectively, the four banks posted $28.5 billion in profit for the fourth quarter, with profits for the full year up nearly 5% from 2024 JPMorgan, Bank of America and Citigroup say spending on cards rose in the fourth quarter, while delinquencies on credit cards edged lower. And yet stocks of these banks fell today, as did tech stocks, weighing on the major US indexes. The NASDAQ led the losses, falling 1%.

As part of his attempt to address concerns around affordability, President Trump has called for a 10% cap on credit card interest rates for one year. There's no guarantee this would go into effect, but if it did, one impact it would have would be shaking up the world of credit card rewards. WSJ personal finance reporter Imani Moise tells us what could be in store for cardholders.

Imani Moise (2:10)

What it means is that it would be harder to get credit card rewards unless you are at the very tippy top of the credit spectrum. So people with high credit scores, people who make a lot of money and therefore spend a lot of money, you shouldn't expect too big changes because those types of rewards are funded mostly through interchange, which are those swipe fees that merchants pay to accept credit cards and also those sky-high annual fees that we've also talked on this show about, which can be as much as $900 a year. But what you will see is that the more basic rewards, so think about things like simple cash back or maybe just a more entry-level rewards card, those will probably get cut. So there was a recent Vanderbilt study that gamed this out a little bit, and they found that in order to basically offset the hit to bank profits from this reduction in rates, they would need to basically eliminate rewards for anyone with a credit score below a 760

Alex Ossola (3:04)

But Imani says it's not clear if Trump's idea will become policy.

Imani Moise (3:08)

What everyone in the industry is asking for is a fleshed out policy document so that they could run their own analysis to game out exactly what this is going to mean for their business lines and what they need to cut back. Everybody wants more details. Legal experts say that it would require an act of Congress to actually cap credit card rates. People are skeptical that it will pass Congress, but we're creating a lot of precedents recently. So who knows if this goes forward?

Alex Ossola (3:40)

Meta has laid off about 1,500 people from its Reality Labs division, which includes the company's virtual and augmented reality business. That's according to a person familiar with the matter. Meta has shifted its focus away from the metaverse and towards the tech industry's newest obsession, artificial intelligence. And Verizon customers across the country reported problems with their cell phone service today. The company says it's working on a fix for the outage. Coming up, we've got surprisingly strong home sales to close out 2025 The latest on the protests in Iran and the Trump administration hitting pause on immigrant visas. That's after the break.

Christopher Mims (4:21)

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Tim Higgins (4:23)

And I'm Tim Higgins.

Christopher Mims (4:24)

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