U
S home sales plummeted to a nearly 30-year low for the second consecutive year in 2024, as high mortgage rates and soaring prices combined with a severe shortage of available homes to freeze out prospective buyers. According to the National Association of Realtors (NAR), existing US home sales totaled 4.06 million last year, a 0.7% decline from 2023 and the weakest year for home sales since 1995.

    The median national home price rose 4.7% to an all-time high $407,500 in 2024, further limiting buyers' purchasing power. The average mortgage rate has hovered around 7%, making it difficult for many to afford homes, while a dearth of inventory has helped prop up prices and kept many on the sidelines.

    NAR chief economist Lawrence Yun noted that home sales have been sluggish since 2022, when mortgage rates began to climb from pandemic-era lows. The current market is characterized by record-high home prices, rising mortgage rates, and a severe shortage of available homes, with just 1.15 million properties on the market at the end of December – well below the historical average.

    Despite a 2.2% increase in sales in December, which rose to a 4.24 million annual pace, the available inventory amounts to only a 3.3-month supply, far short of the balanced market's 4-6 month supply. First-time homebuyers continue to struggle, accounting for just 24% of all homes sold last year, down from their historical share of 40%.