U.S. Existing Home Sales Jump 2.2% in December, Reaching 10-Month High

The National Association of Realtors (NAR) reported a significant uptick in existing home sales for December 2024. Sales rose 2.2% from November, reaching a seasonally adjusted annual rate of 4.24 million units.

This marks the highest level since February 2024, signaling a potential shift in the housing market. Economists had predicted a more modest increase to 4.19 million units.

The actual figures surpassed expectations, with sales jumping 9.3% compared to December 2023. This represents the largest year-over-year gain since June 2021, indicating a robust recovery in the housing sector.

Despite the positive trend, the total number of existing homes sold in 2024 stood at 4.06 million. This figure remains the lowest since 1995, highlighting the lingering effects of recent market challenges.

High mortgage rates and elevated home prices have continued to impact affordability for many potential buyers. Lawrence Yun, NAR’s chief economist, attributed the sales momentum to several factors.

Job growth, wage increases, and improving housing inventory have all played a role in boosting market activity. Yun noted that buyers have adapted to the new normal of mortgage rates between 6% and 7%.

U.S. Housing Market

The median existing-home price for all housing types reached $406,100 in December. This represents a 4.7% increase from the previous year, reflecting ongoing pressure on affordability.

All four major U.S. regions experienced price increases, indicating widespread market strength. Looking ahead, Fannie Mae predicts a more modest growth trajectory for 2025. The agency revised its forecast for existing home sales from an 11% gain to a 4% increase.

This adjustment stems from expectations that mortgage rates will remain above 6% throughout the year. The housing market faces a delicate balance between improving conditions and persistent challenges.

While sales have shown resilience, affordability concerns continue to shape buyer behavior. The coming months will likely reveal whether this upward trend can sustain itself in the face of economic uncertainties.