The latest home sales numbers paint a discouraging picture for the real estate industry. Existing home sales fell in 2024 to the lowest level since 1995.
How many homes sold?
The National Association of Realtors reported 4.06 million existing homes sold in the U.S. last year. It’s a significant drop from the 5 million sold two years prior in 2022.
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What are the key factors?
Two factors have hurt the market: high mortgage rates and lack of supply.
Housing costs are more expensive with the median listing price hitting an all-time high of $407,500 last year. That’s about a 5% increase from 2023.
According to Zillow, the interest rate for a 30-year fixed-rate mortgage as of Monday, Jan. 27, is 6.74%. A 15-year fixed rate is 6.03%, and an Adjustable Rate Mortgage (ARM) is 6.69%.
Zillow Chief Executive Jeremy Wacksman told The Wall Street Journal that the real estate industry is suffering from an availability crisis. He said the shortage amounts to about 4.5 million homes.
He also said the housing market would have to see the Federal Reserve cut interest rates more than once or twice for mortgage rates to follow.
What’s ahead in 2025?
Zillow economists forecasted a slight increase in home sales in 2025, as well as a modest price appreciation.
