In 2024 US home sales fall to lowest   level since 1995

In 2024 US home sales fall to lowest   level since 1995

Sales of existing homes in the U.S. fell to their lowest level in nearly three decades last year, as higher home prices and higher mortgage rates squeezed home buyers.

The National Association of Realtors said Friday that sales of previously owned homes, which make up the vast majority of the market, totaled 4.06 million in 2024. This is the lowest level since 1995 and slightly below the corresponding anemic level of 2023.

The average rate on a conventional, 30-year fixed mortgage peaked at 7.22 percent last year. After briefly slipping to around 6 percent, it has rallied in recent weeks. It reached 7.04 percent last week. And fell to 6.96 percent this week.

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The median price of an existing home, meanwhile, rose steadily for 18 months, reaching a record high of $407,500 in 2024. In December, the median price was $404,400.

Despite tougher conditions for buyers, there was some momentum toward the end of 2024, with existing home sales rising 2.2 percent from the previous month in December to a seasonally adjusted annual rate of 4.24 million, the highest since February 2024.

Employment and wage growth, along with increased inventory, are having a positive impact on the market."

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Mortgage rates were also high in the 1980s, but home prices were much lower then. Buyers today are contending with home prices hovering near unprecedented highs.

That is not expected to change this year.

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Another long-standing problem for housing affordability is the persistent shortage of homes on the market. Total housing inventory improved through 2024, but supply is nowhere near keeping up with demand.

According to a recent estimate by Freddie Mac, there is a housing shortage of 3.7 million units. In December, inventories stood at 1.15 million units, down 13.5 percent from November but up 16.2 percent from a year earlier.

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A major reason for the low supply is the so-called lock-in effect, where some homeowners who locked in low mortgage rates before the Federal Reserve raises interest rates in 2022 prefer not to sell. Are, because they will need it. A mortgage with a much higher rate if they have bought a second home.

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However, some sold last year due to life events such as marriage, divorce or new children, which contributed to last year's steady increase in housing inventory. The problem for this year is that homeowners Not much motivation to sell.

Higher borrowing costs weighed on homebuilding last year, but there is a sense of optimism among builders that deregulation could boost the supply of homes this year, according to the National Association of Home Builders.

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Scott Turner, President Donald Trump's pick to head the U.S. Department of Housing and Urban Development, said during his confirmation hearing on Capitol Hill that he is committed to revising and reducing regulation. spent a few times a year, deregulation can play a role in easing pressures on the housing market.