Existing Home Sales Reach Lowest Level in Nearly 30 Years Amid High Mortgage Rates and Prices
Existing home sales in the US in 2024 hit the lowest level since 1995, with only 4.06 million homes sold on an annual basis. The median home price, meanwhile, reached a record high of $407,500. With mortgage rates close to 7% and homebuying sentiment soft, the strength in existing home sales is unlikely to be sustained.
While sales did show signs of recovery in the final months of 2024, rising 2.2% from November to a seasonally adjusted annual rate of 4.24 million in December, year-over-year sales were still down. Despite this, sales were up 9.3% from the previous year, driven by transactions for homes valued at over $500,000.
The median home price was $404,400, a 6% increase from the previous year, with sales rising by 35% from a year ago for homes priced above $1 million. First-time homebuyers accounted for 31% of home sales in December, up from 29% in December 2023.
Experts note that while there are signs of recovery in the housing market, the impact of regulations on rebuilding California following the wildfires and extreme weather events is still unknown. Additionally, elevated mortgage rates are expected to continue to chill the housing market, making it unlikely that sales will rise further in the near term.
