Sales of previously occupied U.S. homes fell to a 30-year low in 2024 for the second time in as many years as mortgage rates rose. Rising house prices It also freezes homebuyers from the market with very few properties on the market.
The National Association of Realtors said Friday that existing U.S. home sales were 4.06 million last year, down 0.7% from 2023.
This is the weakest year for home sales since 1995 and echoes the full-year results of 2023.
According to NAR, the national median home price rose 4.7% last year to an all-time high of $407,500.
The U.S. housing market is in a sales recession dating back to 2022, when mortgage rates began rising from pandemic-era lows.
Average rates on 30-year mortgages jumped nearly 8% to a nearly 23-year high in October 2023, before dropping to a two-year low last September, according to Mortgage Buyer Freddie Mac. However, it was almost 7%. .
Rising borrowing costs for mortgages, in addition to soaring prices, are limiting the purchasing power of home hunters.
Meanwhile, a lack of homes for sale has helped support prices and kept many home buyers and sellers on the sidelines.
“Given that the U.S. population has grown by more than 70 million people over this period from 1995 to today, is it possible that home sales could be this low?” asked NAR Chief Economist Lawrence Yun . “You can partially answer that question because of affordability issues. “Record home prices, rising mortgage rates, but a lack of inventory.”
At the end of December, there were just 1.5 million homes on the market, Nar said.
This is far below the historical monthly average of approximately 2.25 million.
Inventory available at the end of last month, at current sales pace, equates to 3.3 months of supply.
A more balanced market between buyers and sellers has 4-6 months of supply.
Home sales in December increased 2.2% from the previous month to an annual pace of 4.24 million on a seasonally adjusted basis.
This is the third monthly sales increase, on top of the 4.2 million pace predicted by analysts polled by FactSet.
Sales increased 9.3% in December, the same month last year.
The median home sales price rose for the 18th consecutive month in December to $404,000, an increase of 6% from a year ago.
Limited inventory can help drive prices higher, especially in the more affordable price ranges of certain markets.
That's one reason many first-time home buyers who don't have the home equity toward a down payment continue to struggle to buy a home.
They accounted for 31% of all homes sold last month, up from 30% in November and 29% in December 2023.
However, the annual equity for first-time buyers was 24%.
Historically it was 40%.
