14 housing trends that shaped the year: record house prices, mortgage rate fluctuations, and sales fluctuations
The 2024 housing market mirrored the challenges of 2023 with a scarcity of homes, high prices, and mortgage rates deterring buyers. This resulted in soaring house prices and persistently low affordability, making it one of the least affordable years for homebuyers. A significant number of renters believed they may never own a home.
The market saw a rise in the median homebuying age, reaching a record 56 years old, seven years older than the previous year. More buyers found themselves priced out of the market, leading to a standstill for many.
While some buyers waited for affordability to improve, others decided to take the leap despite market challenges. The presidential election added volatility and unpredictability to the mix.
Despite the difficulties, there were some positive developments such as increased housing inventory, declining inflation, and improved renter affordability.
Below are the trends, data points, and visuals that defined the 2024 housing market.
All data was collected from January to November 2024, sourced from Redfin, Rent., the U.S. Census Bureau, FRED, NAR, and public records. For inquiries about metrics, refer to our metrics definitions page.
1. Record-High Home Prices
In July, the median sale price in the U.S. hit an all-time high of $442,000, surpassing the previous record of $432,000 in 2022. Prices remained at historic highs for nine consecutive weeks.
The 2024 median sale price of $428,200 outpaced all previous years, highlighting the impact of supply and demand dynamics on pricing. Low supply and subdued demand led to a hot market with rising prices, particularly challenging for lower-income residents.
The market dynamics favored sellers looking to downsize or rent, while many buyers struggled to afford homes, with nearly a quarter of those earning less than $50,000 having to make sacrifices to meet payments.
2. San Jose Tops List of Most Expensive Metro Areas
San Jose emerged as the costliest metropolitan area for homebuyers in 2024, with an average monthly median sale price of $1,566,100, marking an 8.5% increase from the previous year. The top ten expensive markets remained relatively unchanged, except for Austin and San Antonio experiencing decreases.
While house prices generally trended upwards, some markets saw declines, exacerbating the affordability crisis, especially among lower-income groups. Housing affordability became a critical issue in the presidential election, reflecting the challenges faced by many potential buyers.
- California dominated the top six most expensive metros.
- Anaheim witnessed the most significant year-over-year price increase in the country, surging by 12.5%.
3. Detroit – The Most Affordable Metro Area
Detroit recorded an average monthly median sale price of $190,865, marking an 8.5% increase from 2023. The city experienced substantial price growth following the pandemic, driven by high demand and limited supply.
- Most affordable metros witnessed notable year-over-year gains, with nine of the ten least expensive areas located in the Rust Belt, continuing the trend from the previous year.
- Austin and San Antonio were the only metros to post year-over-year decreases in prices, coupled with improvements in affordability due to wage growth.
4. Positive Turnaround in Home Sales
The U.S. saw 4.62 million homes sold through November 2024, a slight uptick from the previous year but still below 2022 levels. Monthly sales averaged 423,100, surpassing last year’s figures.
After negative year-over-year trends throughout 2024, home sales turned positive in September for the first time in over three years. Stronger increases of 4.8% in October and 7.2% in November hinted at a promising outlook for 2025.
Factors like significant mortgage rate reductions in August and September contributed to the sales uptick, with pending sales showing strength towards the end of the year. Buyers became more accepting of prevailing mortgage rates, leading to increased sales activity.
- May recorded the lowest home sales in the year, with only 412,150 transactions, marking one of the slowest months since 2012.
- Expensive West Coast markets saw substantial sales growth towards the end of the year, driven by heightened competition due to limited housing supply.
- A spike in mortgage rates in October led to a significant number of cancellations, with approximately 53,000 home purchases affected.
- Natural disasters and insurance challenges impacted Florida metros, resulting in notable drops in home sales.
5. Mortgage Rate Fluctuations
Mortgage rates were a significant driver of market dynamics in 2024, ranging between 6.5% and 7.5%. The volatility in rates influenced buyer decision-making and seller strategies, with many opting to retain pandemic-era rates.
Despite a drop in inflation close to the Fed’s 2% target and multiple interest rate cuts, uncertainty surrounding the economy and the election kept rates elevated. Rate fluctuations were evident throughout the year, impacting buyer activity based on changing rate scenarios.
Buyers were advised to seize the current market conditions, as historically average rates presented opportunities for favorable home purchases. The outlook for 2025 suggested minimal rate variations.
- The Fed’s plan to reduce interest rates twice in 2025 was less than anticipated.
- Economic uncertainty loomed due to potential inflationary policies under the new administration.
6. Inflation Trends
Inflation, following aggressive rate hikes from 2022 to 2023, saw a decline from record highs to 2.7% in November 2024. The Fed’s response included three consecutive rate cuts to stabilize inflation.
Concerns lingered about a potential resurgence in inflation, particularly in the face of policy changes under the new administration. The Fed’s cautious approach and revised projections for 2025 aimed to mitigate inflation risks through controlled rate adjustments.
The pandemic-induced rate adjustments and inflationary pressures underscored the challenges in balancing economic stability and growth.
7. Rent Stability
The median U.S. asking rent peaked at $1,649 in 2024, showing consistency compared to the previous year. Rent remained relatively stable throughout the year, with a slight decline leading into 2025, averaging $1,629 monthly.
Rising wages complemented the stable rental market, making rentals slightly more affordable for certain demographics, such as college graduates and teachers. The market experienced a surge in new apartment completions, leading to a balance between supply and demand.
Regional variations were evident, with Sun Belt and coastal metros witnessing the fastest rent declines, attributed to increased apartment construction during the pandemic. Conversely, Rust Belt and East Coast metros faced supply shortages, impacting rental affordability.
Rental affordability remained a challenge, with half of renters spending over a third of their income on rent, underscoring the ongoing struggle for affordable housing.
8. Decline in New Construction
The average monthly new home starts in the U.S. dropped to 1.35 million in 2024, down from 1.42 million the previous year. Single-family home construction mirrored this trend, with peaks and dips in line with market dynamics.
Anticipated growth in new construction for the following year aimed to address the historic shortage of affordable housing. Despite post-pandemic progress, the housing market still grappled with a significant gap between supply and demand.
Builders’ confidence improved heading into 2025, signaling a potential resurgence in construction activity to cater to the housing needs of the market.
9. Growth in Housing Inventory
An average of 1.19 million homes were listed for sale or pending every month in 2024, marking a substantial 15.8% increase from the previous year.
The rise in housing inventory was attributed to an influx of sellers, prolonged listing durations, and ongoing housing completions. Active listings peaked at 1.73 million in November, signaling a positive trend towards a balanced market.
While inventory recovery was evident, the market still faced challenges in meeting historical supply norms, highlighting the ongoing shortage of affordable homes.
10. Upsurge in New Listings
New listings saw significant growth in 2024, with an average of 544,000 homes listed for sale monthly, representing a 9% increase from the previous year’s record low.
The rise in new listings gradually translated into increased sales activity, particularly towards the latter part of the year. Improved market conditions and buyer confidence led to heightened listing activity, showcasing a positive trend for the housing market.
11. Months of Supply Recovery
The average housing supply stock in 2024 stood at 2.8 months, up from 2.5 months in 2023. The market continued to favor sellers but leaned towards buyers in specific markets, reflecting varying supply-demand dynamics.
Despite the increase in supply, the share of homes changing hands remained low, with only 2.5% of transactions occurring in the first eight months of the year. The pandemic-induced buying spree depleted supply, compounded by a surge in investor purchases.
Efforts to stabilize supply were evident, but the market still faced challenges in achieving a balanced state. Buyers and sellers were advised to consult with agents to navigate local market conditions effectively.
12. Average Time on Market
In 2024, homes spent an average of 39 days on the market, one day longer than the previous year. The slowdown in sales pace reflected affordability constraints, leading to prolonged listing durations.
September witnessed a significant increase in homes on the market for over 60 days, highlighting the challenges faced by sellers. Market variations were evident, with affordable metros observing faster sales compared to expensive regions.
The trend of increasing time on the market underscored the importance of affordability in driving buyer decisions and market dynamics.
13. Cash Purchases and Investor Activity
In 2024, 30.8% of homes were purchased entirely with cash, down from the previous year but still significantly high. Cash transactions followed mortgage rate trends, with fluctuations influencing buyer preferences.
Cash purchases remained elevated, with luxury buyers and investors driving a significant share of these transactions. Affluent buyers leveraged cash purchases to secure favorable deals, contributing to existing disparities in homeownership.
Real estate investor purchases rebounded following a two-year decline, reaching pre-pandemic levels by the end of 2024. The resurgence in investor activity reflected improving market conditions and heightened buyer demand.
Looking Ahead
The challenges and trends of 2024 set the stage for the coming year. For insights into the 2025 housing market predictions, explore our comprehensive analysis of the anticipated market dynamics and trends.