2024 Home Sales Lowest Since 1995

In 2024, U.S. existing home sales dropped to 4.04 million, the lowest level since 1995 and even below the 2008 crisis. The median price for new homes fell below that of existing homes, signaling a market anomaly. With affordability plunging, the gap between home prices and household incomes raises major concerns for buyers and sellers alike.

Historic Drop in Existing Home Sales

The U.S. housing market experienced a significant shock in 2024, as existing home sales fell to their lowest level in nearly three decades. According to recent data, only about 4.04 million existing homes were sold, a number not seen since 1995. This figure even falls below the lows recorded during the 2008 financial crisis, highlighting the severity of the current downturn. A combination of high interest rates, soaring home prices, and income stagnation has created a perfect storm, making it increasingly difficult for Americans to purchase homes.

Unusual Price Trends Between New and Existing Homes

One of the most striking anomalies observed in 2024 is the unusual relationship between the prices of new and existing homes. Traditionally, new homes are more expensive due to the cost of materials, labor, and modern amenities. However, this year, the median price for new homes dropped to $417,400, while the median price for existing homes rose to $419,300. This inversion indicates a growing demand for newer, more efficient homes, possibly fueled by buyers seeking long-term energy savings and fewer repair costs. It also reflects the fact that many homeowners are reluctant to sell, tightening supply in the existing home market and artificially inflating prices.

Affordability Crisis Deepens

The issue of housing affordability has never been more pressing. To buy a median-priced home today, a household must earn at least $109,564 annually—an all-time high. Yet, the median household income stands at only $83,431. This staggering gap means that many potential buyers are priced out of the market entirely. First-time homebuyers are particularly vulnerable, facing not only high purchase prices but also increased insurance premiums, property taxes, and maintenance costs. For many Americans, the dream of homeownership is becoming more distant with each passing year.

Challenges for Home Sellers

For sellers, the landscape has also shifted dramatically. While low inventory continues to support higher asking prices, the pool of qualified buyers is shrinking. Homes are sitting on the market longer, and price reductions are becoming more common in many regions. Sellers must adjust their expectations, often needing to invest more in staging, repairs, or offering buyer incentives such as covering closing costs or buying down mortgage rates. The once-frenzied seller’s market has cooled, demanding a more strategic and flexible approach.

What Lies Ahead for the Housing Market

Looking ahead, the future of the U.S. housing market remains uncertain. Interest rates are expected to stay elevated for the near term, continuing to suppress demand. At the same time, persistent supply shortages, especially in affordable housing, will likely prevent significant price drops in most areas. Policy changes, such as efforts to reduce zoning restrictions and promote new construction, may provide some relief, but results will take time. In the meantime, both buyers and sellers must navigate a more complex and challenging environment.

Conclusion: A New Reality for Buyers and Sellers

In conclusion, the record-low existing home sales in 2024 are a clear signal that the U.S. housing market is under immense strain. High prices, unaffordable mortgage requirements, and a widening income gap have redefined the traditional dynamics of buying and selling property. While opportunities still exist, success in today’s market demands greater financial preparedness, flexibility, and a deep understanding of the shifting landscape. Both buyers and sellers who adapt quickly will be best positioned to weather this new reality.

Juana Lajara, CBR

LAJARA REALTY INC

1 Holland Avenue, Suite 103 Floral Park NY 11001

Email: juana@jmlajararealtor.com

Phone: (718) 607-7313, (516) 519-8436

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