Existing home sales fall to lowest level since 1995

[CRAIG NIGRELLI]

THE NUMBERS ARE COMING IN AND THEY PAINT A DISCOURAGING PICTURE FOR THE REAL ESTATE INDUSTRY. EXISTING HOME SALES FELL IN 2024, TO THEIR LOWEST LEVEL SINCE 1995. THE NATIONAL ASSOCIATION OF REALTORS SAYS 4.06 MILLION EXISTING HOMES, SOLD IN THE U.S. LAST YEAR, A SIGNIFICANT DROP-OFF FROM 5 MILLION JUST TWO YEARS PRIOR IN 2022.
TWO FACTORS ARE DRIVING THE MARKET. HIGH MORTGAGE RATES AND LACK OF SUPPLY. PRICES ARE MORE EXPENSIVE AS WELL, WITH THE MEDIAN LISTING PRICE, HITTING AN ALL-TIME HIGH OF $407,500 LAST YEAR, THAT’S ABOUT A 5% INCREASE FROM THE YEAR BEFORE.
ACCORDING TO THE HOME LISTING SITE, ZILLOW, THE INTEREST RATE FOR A 30-YEAR FIXED RATE MORTGAGE IS 6.74 %, AS OF THE TIME OF THIS REPORT ON MONDAY JANUARY 27TH. A 15-YEAR FIXED IS 6.03 % AND WHAT IS CALLED AN ADJUSTABLE RATE MORTGAGE OR ARM, IS 6.69 %.
ZILLOW CHIEF EXECUTIVE JEREMY WACKSMAN TOLD THE WALL STREET JOURNAL,
A SEVERE SHORTAGE OF AVAILABLE HOMES IS A MAJOR OBSTACLE FOR THE HOUSING MARKET, “ YOU REALLY CAN BOIL THE HOUSING AFFORDABILITY CRISIS DOWN TO AN AVAILABILITY CRISIS. GETTING MORE HOMES AVAILABLE IS GOING TO BE WHAT ULTIMATELY WHAT STARTS TO UNSTICK THE HOUSING MARKET. “HE SAYS THAT SHORTAGE AMOUNTS TO ABOUT 4-AND-A-HALF MILLION HOMES.
WACKSMAN WENT ON TO SAY THAT ACTION BY THE FEDERAL RESERVE WOULD HELP WITH AFFORDABILITY. HE SAID THE HOUSING MARKET WOULD NEED TO SEE MORE THAN ONE OR TWO INTEREST RATE CUTS IN ORDER FOR MORTGAGE RATES TO FOLLOW.
LOOKING AHEAD, ZILLOW ECONOMISTS ARE FORECASTING A SLIGHT INCREASE IN HOME SALES IN 2025, AS WELL AS A MODEST PRICE APPRECIATION. I’M C-N. FOR MORE UNBIASED UPDATES., DOWNLOAD THE STRAIGHT ARROW NEWS APP