The U.S. housing market saw a notable uptick in December, with existing-home sales rising 2.2% to a seasonally adjusted annual rate of 4.24 million units, according to the National Association of Realtors® (NAR). This marks the highest sales pace since February 2024, and a 9.3% increase from December 2023—the largest year-over-year gain since June 2021.
Despite the strong finish to the year, total existing-home sales in 2024 fell to their lowest annual level in nearly 30 years, at 4.06 million transactions. Meanwhile, the median home price reached a record high of $407,500, highlighting persistent affordability challenges for buyers.
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NAR Chief Economist Lawrence Yun highlighted the resilience of the housing market in the face of elevated mortgage rates.
“Home sales in the final months of the year showed solid recovery despite elevated mortgage rates,” Yun said. “Momentum is rising, with sales climbing year-over-year for three straight months. Consumers clearly understand the long-term benefits of homeownership, and job and wage gains are helping boost the market.”
Housing inventory, a key factor influencing prices and availability, dropped 13.5% from November to 1.15 million unsold units. This represents a 3.3-month supply at the current sales pace, down from 3.8 months the previous month but up from 3.1 months a year ago.
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The median existing home price for all housing types rose 6.0% year-over-year to $404,400. All four major U.S. regions reported price increases, with the Northeast seeing the most significant year-over-year gain at 11.8%.
Higher-end properties performed exceptionally well in December, with sales of homes priced above $1 million surging by 35% compared to the previous year. In contrast, sales of homes under $250,000 experienced declines, underscoring affordability challenges in the lower price tiers.
Regional Breakdown
- Northeast: Sales increased 3.9% to an annual rate of 530,000, with a median price of $478,900—up 11.8% year-over-year.
- Midwest: Sales declined 1.0% to 990,000, while the median price rose 9.0% to $298,600.
- South: Sales grew 3.2% to 1.93 million, with a median price of $361,800, reflecting a 3.4% increase from the previous year.
- West: Sales climbed 2.6% to 790,000, with the median price reaching $614,500—up 6.0% from December 2023.
The monthly REALTORS® Confidence Index revealed that properties typically stayed on the market for 35 days in December, slightly longer than the 32 days reported in November. First-time buyers accounted for 31% of sales, showing a modest increase compared to the previous year.
Cash sales made up 28% of transactions, reflecting strong activity among investors and wealthy buyers. Meanwhile, distressed sales—such as foreclosures and short sales—remained at a low 2% of all transactions.
According to Freddie Mac, the 30-year fixed mortgage rate averaged 6.96% as of January 23, a slight decline from the previous week’s 7.04%. Despite the minor decrease, mortgage rates remain significantly higher compared to pre-pandemic levels, continuing to impact affordability for many buyers.
While December’s strong performance offers a positive outlook for 2025, the market still faces hurdles, including affordability concerns and inventory constraints. The next NAR report on pending home sales is set to be released on January 30, providing further insights into the market’s trajectory.
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