Housing Market Stagnant in 2024 Despite Analysts’ Hopes and Mortgage Rate Fluctuations

In 2024, Wall Street analysts had high hopes for the housing market, expecting signs of life to emerge. However, the market remained stagnant throughout the year, much to the disappointment of many. The primary reasons for this lack of movement were attributed to the bumpy path of mortgage rates, low supply, and record-high home prices.

At the beginning of the year, the average 30-year fixed mortgage rate was around 6.6%, according to Freddie Mac data. Despite some fluctuations, the rate remained relatively stable, hovering around the same level as the year progressed. This lack of movement in borrowing costs failed to stimulate significant activity in the buying and selling of homes.

Sales of previously owned homes were on track to set a record for the worst year since 1995 for the second consecutive year. This disappointing trend left experts like Jeff Tucker, principal economist at Windermere Real Estate, surprised and hoping for more activity in the market.

Throughout the year, rising mortgage rates and escalating home prices put pressure on potential buyers, leading to a decrease in pending home sales and existing home sales. Despite some positive indicators, such as an increase in new listings and a decline in mortgage rates in the summer, the housing market failed to see a significant turnaround.

As the year comes to a close, analysts are looking ahead to 2025 with cautious optimism. They believe that housing activity will pick up as buyers and sellers adjust to the reality of higher interest rates. In November, existing home sales showed a promising 6.1% increase from the previous year, indicating a potential upward trend in the market.

Overall, the housing market in 2024 faced challenges due to stagnant mortgage rates, low supply, and high home prices. While the year did not bring the expected revival, analysts are hopeful for a slow but steady climb in the housing market in the coming year.
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