The housing market in the fourth quarter of 2024 presented challenges for potential homebuyers, especially first-time buyers. Despite a slight decrease in home prices and a modest increase in the number of homes listed for sale, the market remained tough to crack for those looking to purchase their first home.
Typically, the last quarter of the year sees a cooling off in prices, but 2024 was no exception. Although prices dipped slightly, the number of homes for sale went up, defying the usual trend for this time of year. However, even with more inventory and lower prices, the total number of existing homes sold in 2024 hit a record low not seen since 1995, according to the National Association of Realtors.
The challenges faced by first-time homebuyers go beyond credit history, with factors like cost of living, insufficient down payments, and low income playing significant roles in hindering their ability to enter the market, as highlighted in BW’s 2025 Home Buyer Report. Additionally, high mortgage interest rates are a concern for both nonhomeowners and homeowners, further complicating the buying process.
Looking ahead to the 2025 homebuying season, while prices are expected to rise slightly, the pace of growth is likely to be more moderate compared to previous years. Inventory is projected to continue increasing, influenced by factors such as mortgage rates and new construction. First-time buyers may find opportunities in new construction homes, which could offer affordability and incentives to make the purchase more feasible.
Ultimately, navigating the current housing market requires careful budgeting, clear priorities, and a willingness to make compromises. With the right approach and understanding of the market dynamics, potential homebuyers can position themselves for success in what continues to be a challenging yet evolving real estate landscape.