The U.S. just experienced its slowest annual sales of homes since 1995

In 2024, the U.S. experienced its slowest year for existing home sales in nearly three decades, with only 4.06 million homes sold, according to the National Association of Realtors. Elevated mortgage rates, hovering between 6% and 7% for much of the year, played a significant role in the decline. Additionally, high home prices and limited inventory created further challenges for buyers and sellers.

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The median home price reached a record high of $407,500 in 2024, driven in part by sales in the high-end market. Many homeowners, locked into historically low mortgage rates below 4% from previous years, are hesitant to sell, reducing the availability of homes for potential buyers. This lack of inventory has further constrained the housing market.

On a positive note, housing supply is improving, with 1.63 million housing units completed in 2024—a 12.4% increase from 2023. New home sales have also gained traction, now accounting for about 30% of the market.

While demand for affordable housing remains high, builders face challenges such as rising material costs, labor shortages, and high borrowing expenses. The market shows some recovery signs, with existing home sales rising 9.3% year-over-year in December. However, affordability and inventory remain key hurdles moving forward.

Source: NPR