According to the latest data released by the National Association of Realtors (NAR), existing home sales in the United States fell to their lowest point in nearly thirty years last year, but showed signs of recovery in the final months of the year.
The association stated in a press release on January 24th, “In 2024, the annualized total volume of existing home sales (4.06 million units) dropped to the lowest level since 1995.” The total inventory at the end of December last year was 1.15 million units, a 16.2% increase compared to the previous year. Based on the current monthly sales pace, this equates to a 3.3-month supply. Typically, a six-month supply is considered a sign of a balanced market. Anything below that level indicates a seller’s market where homes can be sold in a matter of months.
NAR’s Chief Economist Lawrence Yun stated that despite higher mortgage rates at the end of last year, home sales continued to show strong signs of recovery. The average weekly rate for a 30-year fixed-rate mortgage rose from a low of 6.08% at the end of September 2024 to 6.91% on January 1, 2025.
“Winter home sales usually soften compared to spring and summer, but the momentum is building, with three consecutive months of year-over-year increases,” Yun said. “Consumers evidently understand the long-term benefits of homeownership. Growth in employment and wages, along with an increase in inventory, have positively impacted the market.”
While the median home price hit a historical high of $407,500 last year, existing home sales concluded at a historic low of 4.06 million units.
In December 2024, the median existing home price increased by 6% year-over-year, with price gains seen across all four major regions in the United States.
Yun attributed part of the rise in median home prices to the stronger performance in the high-end real estate market. He noted that in December 2024, sales of homes valued at over $1 million soared by 35% year-over-year, while sales of homes priced below $250,000 saw declines.
Real estate platform Zillow predicts an increase in home sales this year, but expects the price growth to be more limited. The company forecasts a 2.6% rise in home prices in 2025, a “relatively slow growth rate” compared to 2024. They anticipate existing home sales to reach 4.3 million units this year.
Zillow’s Chief Economist Skylar Olsen stated, “While affordability concerns will remain, buyers should expect more inventory in the market, meaning they will have more time to consider their options and have more leverage in negotiations.”
A report released by the real estate brokerage firm Redfin on January 25th indicated that Americans’ housing affordability worsened, with the median monthly mortgage payment for U.S. homes reaching $2,686 in the four weeks leading up to January 19, “the highest level in nearly seven months.”
Redfin attributed the high costs to rising home prices and mortgage rates. Pending home sales fell by 10.1% year-over-year, marking the largest drop in over a year.
Redfin’s Housing Demand Index reached near its lowest level since June 2024. The average time to sell a home was 52 days, the “longest in the past two years.”
The report noted, “Other factors contributing to the decline in pending sales included extreme cold weather and snow in parts of the U.S., wildfires in Southern California, and limited supply of new listings.” It also mentioned that “some potential buyers may have chosen to hold off on purchasing before the inauguration of President Donald Trump to see if the new administration would take immediate action in the housing sector.”
President Donald Trump signed a memorandum last week aimed at curbing the rising costs of inflation faced by Americans, including measures to lower housing costs.
The memorandum blamed certain regulatory requirements for being a factor contributing to the problems, citing these costs as “accounting for 25% of the total cost of new home construction.”
Trump’s executive order directed agencies to provide Americans with “urgent price relief,” including taking steps to lower housing costs and improve housing supply in the market.
Bill Pulte, known for his charitable work, was recently nominated by Trump to serve as the Director of the Federal Housing Finance Agency (FHFA), which oversees Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.
The nomination was welcomed by the National Association of Home Builders (NAHB).
NAHB Chairman Carl Harris stated, “As a businessman and philanthropist with deep ties to the residential construction industry, Pulte understands the importance of ensuring that builders and developers have access to financing to construct new homes and that consumers can easily obtain affordable mortgage credits. Once confirmed, NAHB looks forward to working with Pulte to promote a secure, robust, and fluid housing finance system to help builders increase the supply of new homes and apartments to meet the nation’s housing needs.”