Here’s why home sales in 2024 fell to their lowest level in nearly 30 years

Sales of previously occupied US homes fell in 2024 to a nearly 30-year low for the second time in as many years as elevated death rates, rising home prices and few properties in the freezing housing market. future of homes off the market.

The National Association of REALTORS said Friday that existing U.S. home sales totaled 4.06 million last year, a 0.7% decline from 2023.

This is the weakest year for home sales since 1995, echoing full-year results from 2023.

The national median home price for all of last year rose 4.7% to an all-time high of $407,500, the NAR said.

The US housing market has been in a sales slump dating back to 2022, when mortgage rates begin to climb from pandemic-era lows.

The average rate on a 30-year mortgage rose to a 23-year high of nearly 8% in October 2023 and briefly fell to a 2-year low last September, but has mostly been rising around 7%, according to death.

Elevated home loan borrowing costs have a limited power of house hunters at the top of years of soaring prices.

A death of homes for sale, meanwhile, has helped bid prices, helping to keep many homebuyers and sellers on edge.

“How is it possible that home sales can be low, considering that the US population has grown by more than 70 million during this time period from 1995 to today?” asked Lawrence Yun, NAR’s chief economist. “One can answer this question in part because of the issue of affordability. “Record high home prices, rising mortgage rates, but also a lack of inventory.”

At the end of December, there were only 1.15 million homes on the market, Nar said.

That’s well below the historical monthly average of about 2.25 million.

On-hand inventory at the end of last month amounts to a 3.3-month supply, going by the current peace of sales.

In a more balanced market between buyers and sellers, there is a 4 to 6 month supply.

Home sales in December rose 2.2% from the previous month on a seasonally adjusted basis to an annual pace of 4.24 million.

That’s the third straight monthly increase in sales and tops the 4.2 million pace forecast by analysts polled by FactSet.

Sales rose 9.3% in December compared to the same month last year.

The median home sales price rose for the 18th consecutive month in December to $404,000, up 6% from a year earlier.

Limited inventory, especially in the more affordable price range of a given market, contributes to higher prices.

This is one reason that many first-time home buyers who don’t have any home equity to put toward their down payment continue to struggle to afford 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 share of first-time buyers was 24%.

It was 40% historical.