U.S. existing home sales ended 2024 on a strong note, offering a promising sign for 2025, according to real estate professionals. Home prices, however, are not expected to drop in the new year.
The median existing price also increased by 6 percent from December 2023, to $404,000, the 18th consecutive month of year-over-year price growth and the largest year over year since October 2022.
The inventory of unsold homes also decreased by 13.5 percent from the previous month to 1.15 million at the end of December 2024.
“December’s data show that home sales increased for the third consecutive month, even as mortgage rates continued to rise,” she said. “This is a promising sign for 2025, suggesting that the housing market’s most challenging period may now be behind us.”
Evangelou noted that the first quarter typically sets the stage for the more active spring and summer markets. NAR statistics indicate that, historically, only about 19 percent of the year’s total home sales happen during the first three months of a year, making it the slowest period for real estate.
“However, the housing market defied typical seasonal trends in 2024,” she said. “Activity slowed during the summer as mortgage rates exceeded 7 percent, but pent-up demand led to a rebound in the fall. By the final quarter, the market began to recover, gradually coming off from summer lows.”
Nationwide, first-time homebuyers were responsible for 31 percent of December 2024’s sales—up from 30 percent in November 2024 and 29 percent in December 2023. Cash sales accounted for 28 percent of December’s transactions. Individual investors or second-home buyers purchased 16 percent of homes sold in December 2024.
The Northeast saw the highest gain in sales growth at 3.9 percent, to $530,000, an increase of 10.5 percent from December 2023. The median sales price in December 2024 came in at $478,900—up 11.8 percent from last year.
America’s southern region experienced a 3.2 percent month-over-month hike in home sales, to 1.93 million in December 2024, a rise of 9 percent from December 2023. The median price in the South held at $361,800, increasing 3.4 percent from December 2023.
While the West saw only a modest gain in sales at 2.6 percent, it continued to boast the highest median sales price at $614,500, growing 6 percent from December 2023. Home sales in December 2024 tallied 790,000, rising 12 percent over December 2023.
Only the Midwest experienced a decline in sales, by just 1 percent, in December 2024, to 990,000. However, that number was a 6.5 percent rise from December 2023. The Midwest also reported the lowest median sales prices, at $298,000—a 9 percent uptick year over year.
Christy Walker, president of Phoenix Realtors, told The Epoch Times that she was a little surprised by the higher median sales prices reported.
“However, the West does cover such a large territory with higher prices in California and Washington, and people who can’t keep up with the pricing are starting to move to more affordable places,” she noted.
Walker, a realtor with RE/MAX Signature in Phoenix, said their region has already become more balanced, with homes now typically spending up to 90 days on the market.
“We do have less inventory of existing homes, but there are a lot of developers building new homes to try to keep up with the demand,” she said.
With a median sales price of $450,000 in the greater Phoenix area, some first-time homebuyers are flocking to the region, she said.
“About half of the homes are going to be under $450,000, so that means these new buyers will be able to find a decent home in the $300,000 to $400,000 range,” Walker said. “We are expecting a robust spring market.”
According to Walker, Phoenix has one of the nation’s youngest populations in the country, with an average age of 35.
“It’s also a boom area for people relocating for job opportunities, and it gives younger people the opportunity to get out of the rental rat race,” she said.
Young couples without children will often opt for condo living, whereas those with children or pets will often seek out a single-family home with a yard.
Walker doesn’t see prices coming down anytime soon, even with a more active market.
“I think we’re still experiencing a housing shortage, and in the next three to five years, we’ll see more people coming into that age range when they want to buy their first home,” she said.
“Despite rising mortgage rates, we’re seeing busier activity in the market, which indicates that buyers and sellers have started to come to terms with the reality that the ultra-low mortgage rates of the pandemic are not coming back,” Evangelou said.
“While mortgage rates still play an important role in shaping affordability, many buyers now appear more willing to adjust their expectations, even at the current rate levels.”
She predicts the market will stabilize as housing inventory improves but cautions that it will likely remain a seller’s market in most areas of the country, due to persistent demand, housing supply, and affordability challenges.
“At the national level, we don’t anticipate any home price drop this year,” Evangelou said. “However, local markets struggling with weak affordability conditions may continue to see a slowdown in home price growth. We expect overall home price growth to moderate to around 2–3 percent in 2025.”
