The United States has published its slowest annual sales since 1995: NPR

The final sales figures for houses last year are underway, and the story is quite dark: 2024 was the slowest year for sales of existing houses in almost three decades.

Existing home sales last year totaled 4.06 million, the lowest on an annual basis since 1995, according to the National Association of Realtors on Friday.

A big factor behind the slowdown was high mortgage rates, which spent most of the year greater than 6.5%.

Although rates reach a minimum of 6.08% at the end of September – just after reducing interest rates for the federal reserve for the first time since 2020 – they have climbed again lately. Last week. The average rate on a 30 -year mortgage managed the 7%mark, before dropping slightly this week to 6.96%.

Experts say that rates of 6 to 7% are the new normal.

“The uncertainty of economic and monetary policy and inflationary concerns will probably maintain high mortgage rates for a near future,” said the president and chief executive officer of the Association of Mortgage Bankers, Bob Broeksmit, in a press release.

Meanwhile, the prices of houses that did The sale was very high, because more sales at the upper market end pushed median prices. The median price of houses reached $ 407,500 in 2024, a record level.

But there are signs of relaxation: sales of existing houses in December were 9.3% higher than a year earlier.

“House sales in the last months of the year have shown a solid recovery despite high mortgage rates,” said NAR, Lawrence Yun, in a statement. “Sales of houses during the winter are generally softer than spring and summer, but the momentum increases with the climbing of sales from one year to the next for three consecutive months … ‘Employment and salary, as well as increased stocks, have a positive impact on the market. “”

A difficult sale to abandon low prices

It is not only that mortgage rates are high – it is that so many current owners have locked rates less than 4% only a few years ago when the United States benefited from low interest rates.

Danushka Nanayakkara, deputy vice-president of forecasts at the National Association of Homebuilders, said that many potential buyers and sellers “locked themselves up in these historic mortgage rates in 2021, 2022.”

“And I think at the moment, the fact that mortgage rates oscillate almost 7%, it is very difficult to convince this group of people to let them go and become buyers of movement,” she said.

Traditionally, she says, people buy a start-up house, then after about seven or eight years, they go to a more expensive house.

But abandoning a very low mortgage rate is a difficult sale, and the high prices of houses do not facilitate the task – which means that there have not been many options to choose for Baptists.

“Taken together, the cost of the loan, the fact that mortgage rates are really high, high prices of houses and low inventory levels – I think that are all factors that have played a role in sales existing houses slowing down last year “” dit Nanayakkara.

More supply arrives

At least, there are good news in terms of supply.

Last year was good for the completion of more accommodation: approximately 1.63 million dwellings were completed in 2024, according to census data, or 12.4% above the figure of 2023.

As sales of existing houses have slowed down, sales of new houses have become a larger part of the market – around 30%, explains Nanayakkara. There are now many more inventory of new houses for sale than existing houses for sale.

Despite the slow year for sales of existing houses, there is always a large demand for housing, in particular affordable housing. But house manufacturers are faced with challenges: high borrowing costs, a tight labor market and an increase in material prices.

“It makes it difficult for manufacturers to respond to this growing need for housing,” said Nanayakkara. “At the same time, there is a lot of desire for more affordable flexible housing solutions, such as developing houses in row, multifamilial projects, models integrated into the law. It is this delicate balancing act. “”