The median price of homes reached a record high of $407,500 in 2024.
Existing home sales in the United States hit an almost three-decade low last year but showed signs of recovery in the final months, according to the latest numbers released by the National Association of Realtors (NAR).
“On an annual basis, existing-home sales (4.06 million) declined to the lowest level since 1995” in 2024, the association said in a Jan. 24 statement. Total inventory at the end of December 2024 was at 1.15 million units, up 16.2 percent from a year ago. This is equivalent to 3.3 months’ supply at the current monthly pace of sales. Typically, a six-month supply is suggestive of a balanced market. Anything below indicates a seller’s market where homes can be sold within a few months.
NAR Chief Economist Lawrence Yun said that home sales showed a solid recovery despite higher mortgage rates in the final months of 2024. The average weekly rate on a 30-year fixed-rate mortgage had jumped from a low of 6.08 percent in late September 2024 to 6.91 percent by Jan. 1.
“Home sales during the winter are typically softer than the spring and summer, but momentum is rising with sales climbing year-over-year for three straight months,” Yun said. “Consumers clearly understand the long-term benefits of homeownership. Job and wage gains, along with increased inventory, are positively impacting the market.”
The decades-low existing-home sales of 4.06 million units came while the median price of homes hit a record high of $407,500 last year, NAR said.
In December 2024, the median existing-home price was up 6 percent from a year ago, with all four U.S. regions registering price hikes.
Yun attributed the elevated median home price partly to the relatively better performance shown by the upper end of the housing market. For homes valued at $1 million, sales jumped 35 percent from a year ago in December 2024. In contrast, sales declined for homes priced below $250,000, he said.
Real estate marketplace Zillow has forecast more sales this year but only modest growth in home values.
The company expects home prices to rise by 2.6 percent in 2025, a “relatively slow pace,” similar to 2024. The company predicts existing home sales to be at 4.3 million units this year.
“While affordability challenges will remain, buyers should expect more homes on the market, meaning more time to consider their options and more leverage in negotiations,” Zillow Chief Economist Skylar Olsen said.
