Housing Market Slump: 2024 Home Sales Fall to Nearly 30-Year Low/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. home sales in 2024 fell to their lowest levels since 1995, with only 4.06 million properties sold. High mortgage rates, rising home prices, and limited inventory have sidelined many buyers. The median home price hit a record $407,500, while December sales rose slightly for the third straight month but remained far below historical averages.
U.S. Home Sales in 2024: Quick Looks
- Sales Drop: Total home sales hit 4.06 million, the lowest since 1995.
- Record Prices: Median home price rose 4.7% to $407,500.
- Mortgage Rates: Averaged near 7% throughout 2024, hitting a 23-year high in October 2023.
- Low Inventory: Only 1.15 million homes available, far below the 2.25 million historical average.
- December Uptick: Sales rose 2.2% from November, marking three straight months of increases.
Housing Market Slump: 2024 Home Sales Fall to Nearly 30-Year Low
Deep Look
LOS ANGELES — The U.S. housing market struggled in 2024, with sales of previously occupied homes hitting their lowest levels since 1995. According to the National Association of Realtors (NAR), only 4.06 million homes were sold, marking a 0.7% decline from 2023. This slump continues a trend that began in 2022 as mortgage rates and home prices soared, pushing many prospective buyers out of the market.
Skyrocketing Prices and Mortgage Rates
The median national home price climbed 4.7% in 2024 to a record $407,500. Meanwhile, mortgage rates remained a significant barrier for buyers. The average 30-year mortgage rate hit nearly 8% in October 2023, the highest in 23 years. While rates briefly dipped to a two-year low in September, they hovered around 7% for most of 2024, according to Freddie Mac.
These elevated borrowing costs have drastically reduced buyers’ purchasing power, adding to years of price increases that began during the pandemic. For many buyers, the cost of financing a home has become prohibitively high.
Low Inventory Keeps Buyers on the Sidelines
Compounding the issue is a persistent lack of available homes. At the end of December 2024, only 1.15 million homes were on the market, far below the historical average of 2.25 million. This limited supply has helped sustain high prices and deter both buyers and sellers.
A balanced housing market typically has a 4- to 6-month supply of homes, but the current inventory represents only 3.3 months’ worth of supply at the current sales pace. This imbalance has kept competition high and prices rising, even as demand wanes.
December Sales Show Modest Growth
Despite the challenging market, December offered a glimmer of hope. Sales of existing homes rose 2.2% from November to an annual pace of 4.24 million, marking the third consecutive month of increases. This exceeded analysts’ forecasts of 4.2 million, according to FactSet.
Year-over-year, December sales surged 9.3%, highlighting a slight recovery from the significant declines earlier in the year. The median home sales price also rose 6% from December 2023 to $404,000, the 18th consecutive month of price increases.
Long-Term Outlook
The U.S. housing market’s slump reflects the interplay of multiple factors, including rising interest rates, high prices, and a lack of inventory. While modest sales growth in late 2024 suggests some stabilization, industry experts warn that significant improvements may take time, particularly as mortgage rates remain elevated.
As Brian Jacobsen, an economist at Annex Wealth Management, puts it: “The housing market will need either a significant drop in rates or a sharp increase in inventory to bring balance back to buyers and sellers.”
Until those shifts occur, the housing market will likely remain challenging for both buyers and sellers, with affordability and availability continuing to weigh heavily on the market.
You must Register or Login to post a comment.