US Home Sales Plummet in 2024 as Prices and Mortgages Soar

The US housing market in 2024 was characterized by a significant decline in home sales, as soaring prices and mortgage rates deterred potential buyers. According to the National Association of Realtors (NAR), existing-home sales fell to a 4.06 million pace, the lowest since 1995, while the median price of homes that sold last year reached a record high of $407,500.



The primary factors contributing to the decline in home sales were high mortgage rates and limited housing inventory. Mortgage rates reached record highs in 2024, with the average 30-year mortgage rate hovering around 6.88% in October. This made homeownership less affordable for many potential buyers, leading to a decrease in sales. Additionally, the housing supply remained low, with a 4.3-month supply of existing homes for sale in September 2024. This low inventory contributed to a seller's market, driving up prices and making it difficult for buyers to find suitable properties.



The presidential election also played a role in the volatility and unpredictability of the housing market in 2024. The uncertainty surrounding the outcome and potential policy changes contributed to a pause in homebuying activity, further slowing down sales and driving up demand for housing, which in turn drove up prices.

The increase in home prices and mortgage rates had significant impacts on different demographic groups, particularly low-income residents, and exacerbated housing affordability issues. Nearly a quarter of residents making less than $50,000 had to skip meals to afford their housing payments, highlighting the severe financial strain caused by high home prices and mortgage rates. The median homebuying age jumped to a record 56 years old in 2024, seven years older than in 2023, indicating that younger, often lower-income individuals were priced out of the market.



The consequences of the decline in home sales and the increase in home prices and mortgage rates were far-reaching. Housing affordability became a major issue for voters in the presidential election, and the market was so difficult that many homebuyers sat out the year on the sidelines, waiting for affordability to improve. However, others decided to take the leap, even with the market headwinds.

In conclusion, the US housing market in 2024 was characterized by a significant decline in home sales, as soaring prices and mortgage rates deterred potential buyers. The presidential election, high mortgage rates, and limited housing inventory contributed to the market's volatility and unpredictability. The increase in home prices and mortgage rates had significant impacts on different demographic groups, particularly low-income residents, and exacerbated housing affordability issues. As the market continues to evolve, it will be crucial to monitor these trends and address the root causes of income inequality and support economic mobility to mitigate the impact of high home prices and mortgage rates on low-income residents.