Washington
Cnn
–
Sales of existing housing in the United States fell last year at their lowest level for almost three decades, while exorbitant real estate prices and high mortgage rates have slowed down housing buyers.
Sales of second -hand houses, which constitute the vast majority of the market, totaled 4.06 million in 2024, announced on Friday the National Association of Real Estate Agents. This is the lowest level since 1995 and slightly lower than the equally anemic levels of 2023.
The average rate of a conventional fixed mortgage over 30 years reached a summit of 7.22 % last year. After briefly slipping at almost 6 %, it has increased in recent weeks, reaching 7.04 % last week and 6.96 % this week, according to Freddie Mac.
Meanwhile, the median price of an existing house climbed for 18 consecutive months, reaching a record level of $ 407,500 in 2024. In December, the median price was $ 404,400.
Despite the difficult conditions for buyers, there was a certain momentum towards the end of 2024, with sales of existing housing up 2.2 % in December compared to the previous month to reach an annual rate of an annoyance of 4, 24 million, the fastest rate since February 2024.
“House sales in recent months of the year have shown a solid recovery despite high mortgage rates,” Lawrence Yun, NAR chief economist, in a statement, said. “Consumers clearly include long -term benefits of home ownership. Employment and wage gains, as well as the increase in stocks, have a positive impact on the market.
The American real estate market may not improve a lot for buyers this year.
Mortgage rates should remain above 6 % until 2026. Mortgage rates were also high in the 1980s, but housing prices were then much lower. Buyers are now faced with real estate prices that continue to come close to unprecedented summits.
And in some markets, the owners are also faced with home insurance premiums that soar. This should not change this year.
Another long -standing problem regarding the affordability of housing is the persistent lack of housing on the market. The total stock of housing improved throughout 2024, but the supply is far from following the demand.
There is a shortage of housing of 3.7 million units, according to a recent estimate by Freddie Mac. In December, stocks amounted to 1.15 million units, down 13.5 % compared to November but up 16.2 % compared to the previous year.
One of the main reasons for the non-offer is called the locking effect, in which some owners who have insured a low mortgage rate before the Federal Reserve begins to increase rates of ‘interest in 2022 prefer not to sell, as they should assume one mortgage at a much higher rate if they bought another house.
However, some dwellings were sold last year due to life events such as a marriage, a divorce or new children, which contributed to the constant increase in the housing stock last year. The problem this year is that the owners are not really encouraged to sell.
High borrowing costs also weighed on the construction of housing last year, but there is a feeling of optimism among manufacturers as to the fact that deregulation could stimulate the supply of housing this year, according to the association national housing manufacturers.
Scott Turner, chosen by President Donald Trump to lead the United States Ministry of Housing and Urban Development, said during his confirmation hearing in Capitol Hill that he had committed to review and reduce the regulations. Since the Fed should only reduce its interest rates a few times this year, deregulation could help to mitigate pressure on the real estate market.
But the reduction in regulations would probably not be enough to thwart some of the Trump administration’s promises in terms of customs duties and massive evictions, which could increase the cost of building new housing.
