Sales of Existing Homes in US Fall to Lowest Level in Almost Three Decades
Sales of existing homes in the US fell to the lowest level in almost three decades in 2024, as sky-high home prices and elevated mortgage rates squeezed home buyers. According to the National Association of Realtors, sales of previously owned homes totaled 4.06 million in 2024, the lowest level since 1995 and slightly below 2023’s similarly anemic levels.
The average rate on a conventional, 30-year fixed mortgage reached a peak of 7.22% last year, and while it has dipped slightly, it remains above 6%. The median price of an existing home has climbed for 18 months straight, reaching a record high of $407,500 in 2024.
Despite the tough conditions for buyers, there was some momentum toward the end of 2024, with existing-home sales rising 2.2% in December from the prior month. However, the US housing market is not expected to improve much for buyers this year, with mortgage rates expected to remain above 6% through 2026.
Homeowners are also dealing with skyrocketing home insurance premiums, which are not expected to change this year. Another longstanding issue for housing affordability is a persistent lack of homes on the market, with a housing shortage of 3.7 million units. The undersupply is attributed to the lock-in effect, where some homeowners prefer not to sell due to the high mortgage rates.
However, some builders are optimistic that deregulation could boost the supply of homes this year. The National Association of Home Builders believes that deregulation could ease pressure in the housing market, but it may not be enough to offset the costs of building new homes, which could be increased by tariffs and mass deportations.