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The US housing market just faced its biggest slump in nearly three decades, with 2024 home sales hitting their lowest point since 1995. Existing-home sales fell by 0.7% compared to the previous year, totaling just 4.06 million—a stark contrast to the boom seen just a few years ago. So, what’s behind this dramatic downturn?
The answer lies in the ongoing challenge of high mortgage rates and rising home prices, which have left potential buyers on the sidelines. Even with the Federal Reserve’s efforts to lower short-term interest rates, mortgage rates hovered between 6% and 8% in 2024, making it harder for many Americans to afford homes. The median home price reached a staggering $407,500, marking a 4.7% jump from 2023.
This combination of high rates and escalating prices, paired with a severe shortage of available homes, has made buying a house feel out of reach for many, especially first-time buyers. Inventory levels are at historic lows, and experts warn the situation could worsen.
The question remains: can the market bounce back in 2025, or are we entering a new era of unaffordable housing? As both candidates for the 2024 presidential election promise to tackle the crisis, all eyes are on the future of the housing market.
