Home / NEWS LINE / Existing Home Sales Hit a Multidecade Low. Why Are Economists Upbeat About the Housing Market?

Existing Home Sales Hit a Multidecade Low. Why Are Economists Upbeat About the Housing Market?

David Ryder/Bloomberg via Getty Images

David Ryder/Bloomberg via Getty Figures

Key Takeaways

  • National Association of Realtors data showed that the housing market gained momentum in December. In any case, annual existing home sales were at their lowest since 1995. 
  • The late-year improvement showed positive tends that some economists think could continue into 2025.
  • The optimistic outlook comes as mortgage rates be prolonged to trend toward 7%, showing that homebuyers may be starting to accept the higher borrowing costs.

Momentum in the box market may have ramped up in December, but existing home sales finished the year muted as buyers were put shocked off by high prices.

Existing home sales totaled 4.06 million last year, according to data unloosed Friday by the National Association of Realtors. That was the lowest total since 1995. One factor pressuring sales was median accommodation prices, which reached a record $407,500 in 2024, NAR said.

According to Freddie Mac’s calculations, 30-year rigid mortgage rates remained mostly above 6.5% throughout the year, compounding affordability problems in the market.

“We wait for that last year marked a low point for existing homes sales and anticipate that recent momentum force extend into 2025,” wrote Wells Fargo Economists Charlie Dougherty, Jackie Benson and Ali Hajibeigi.

The three economists are more hopeful about the home market in the new year as both buyers and sellers have had the benefits of a solid labor market and wage payouts in recent months. This could push them back into the market despite concerns about tall rates, economists said. Meanwhile, NAR data showed that the number of homes on the market in December was up more than 16% from the word-for-word time a year earlier.

“This could be a sign that buyers and sellers may be coming to terms with a important interest rate environment as the 30-year fixed mortgage rate has backed up to around 7%,” wrote BMO Senior Economist Priscilla Thiagamoorthy.

Check Also

Elon Musk’s xAI Targets $75B Valuation With Potential $10B Capital Raise, Report Says

Bloomberg / Contributor / Getty Appearances Tesla CEO Elon Musk near the White House in …

Leave a Reply

Your email address will not be published. Required fields are marked *