Despite that, home prices continued to rise

With declining affordability, sales of existing homes in 2024 fell to 4.06 million, the lowest level since 1995. However, the median home price reached another record high of $407,500, reflecting a 6.0% increase from the previous year, according to data from the National Association of Realtors.
Theres a connection between declining sales and rising prices. Sales were down largely because of a lack of inventory, not entirely because of reduced demand. There was enough demand from qualified buyers to continue to push prices higher.
The higher median price is also indicative of who was buying homes last year. This price elevation was partly attributed to the upper-end market's stronger performance, with sales of homes priced above $1 million rising by 35% year-over-year.
Home sales ended the year on a high note. Decembers existing home sales were up 2.2% from November and were 9.3% higher than in December 2023.
Sales rose in three major U.S. regions, with the Northeast, South, and West experiencing growth, while the Midwest saw a slight decline. Year-over-year, all four regions recorded accelerated sales.
Not bad considering mortgage rates
NAR Chief Economist Lawrence Yun made note of the markets improved performance in the final months of the year, calling it impressive in light of the challenges posed by mortgage rates. But the data suggest that things arent getting much better for would-be buyers.
The total housing inventory at the end of December was 1.15 million units, a 13.5% decrease from November but a 16.2% increase from the previous year. This inventory level represents a 3.3-month supply at the current sales pace, slightly tighter than the 3.8-month supply in November.
First-time buyers accounted for 31% of December's sales, up from 30% in November and 29% in December 2023. Cash sales comprised 28% of transactions, reflecting a slight increase from the previous month.
Photo Credit: Consumer Affairs News Department Images
Posted: 2025-01-24 15:44:12