Existing-home sales closed out the year at a record pace, with a 9.3% boost in year-over-year sales marking the highest increase since June 2021, according to the National Association of Realtors (NAR). What’s more, December’s existing-home sales climbed 2.2% month over month, the strongest pace since February 2024. These gains in home sales came despite elevated mortgage rates. According to Lawrence Yun, chief economist for the NAR, “home sales during the winter are typically softer than the spring and summer, but momentum is rising with sales climbing year over year for three straight months.” He believes buyers will continue to see the long-term benefits of home ownership. “Job and wage gains, along with increased inventory, are positively impacting the market.”

Historic Low Sales—Could They Continue?

Despite the year-end boost, overall home sales in 2024 dropped to their lowest level in almost 30 years, with 4.06 million sales recorded. Inventory played a role in the decline, with the number of homes available on the market falling 13.5% from November to December. Total inventory in December was down to 1.15 million homes, or a 3.3-month supply at the current sales pace. Affordability was also a concern, with Freddie Mac reporting that the 30-year fixed-rate mortgage remained around the 7% mark. Tight inventory coupled with affordability issues means both buyers and sellers will need to tread the housing market carefully as the year unfolds.

Record High Prices

Further impacting home affordability were higher home prices, which reached a median of $407,500 in 2024, a record-breaking number. Prices were up 6% from a year earlier—the largest gain in year-over-year prices since October 2022 and the 18th month in a row of year-over-year increases. The climb in median home prices was attributed to a better performance of homes at the upper end of the market. Added Yun, “Sales rose by 35% from a year ago for homes priced above $1 million, while sales fell for homes priced under $250,000.”

First-Timers, Cash Buyers, and Investors

First-time buyers jumped into the housing market at the end of the year, accounting for 31% of all home sales in December, up from 29% a year earlier. However, according to the NAR “2024 Profile of Home Buyers and Sellers,” the annual share of first-time buyers hit a record low of 24%. All-cash buyers also saw potential in the market, representing 28% of all December transactions. This was up from 25% a month earlier but lower than 29% a year earlier. Investors and second-home buyers, who account for the majority of all-cash purchases, were responsible for 16% of all transactions in December, up from 13% in November and unchanged from December 2023. Distressed sales, meanwhile, remained unchanged at 2%.

Regional Sales Breakdown

• Northeast: Existing-home sales annual rate of 530,000; an increase of 3.9% from November 2024 and 10.4% from December 2023. The median sales price of $478,900 represented an 11.8% increase from December 2023.

• Midwest: Existing-home sales annual rate of 990,000; a decrease of 1% from November 2024 but an increase of 6.5% from December 2023. The median sales price of $298,600 represented a 9% increase from December 2023.

• South: Existing-home sales annual rate of 1.93 million; an increase of 3.2% from November 2024 and 9% from December 2023. The median sales price of $361,800 represented a 3.4% increase from December 2023.

• West: Existing-home sales annual rate of 790,000; an increase of 2.6% from November 2024 and 12.9% from December 2023. The median sales price of $614,500 represented a 6% increase from December 2023.