D
espite a December surge, existing home sales ended the year at 4.06 million, the lowest rate since 1995. The market's last-ditch effort to pull ahead in December wasn't enough to prevent 2024 from being the slowest year for existing home sales in three decades. Sales increased by 2.2% from November and jumped 9.3% from December 2023, but remained at a historically low level.

    High mortgage rates and limited inventory continued to hinder the market, according to Lisa Sturtevant, chief economist at Bright MLS. Historically sluggish sales are reminiscent of the Great Recession, when existing home sales plummeted from 7.1 million in 2005 to 4.1 million in 2008.

    The U.S. has averaged around 5.2 million annual home sales over the past decade, but it may take years for the market to return to that level, possibly not until the 2030s. The mortgage rate lock-in effect has been more persistent than expected, discouraging homeowners from selling and keeping inventory low.

    A late-year bump in home sales has provided some optimism for this spring, but the strength of this uptick will be tested in the months ahead. Inventory fell 13.5% between November and December, but was up 16.2% compared to a year ago. Nationally, supply rose to 3.3 months, still below the balanced market level of 4-6 months.

    With inventory in sellers' market territory, home prices have continued to rise, reaching a record high of $407,500 in 2024.